AN INTELLECTUAL PROPERTY LAW PRIMER
FOR MULTIMEDIA AND WEB DEVELOPERS
Copyright 1996 by J. Dianne Brinson and Mark F. Radcliffe
LICENSE NOTICE: This article may be copied in its entirety for personal
or educational use (the copy should include a License Notice at the
beginning and at the end). It may posted on gopher and FTP sites, but
please provide notice of such posting to the authors at the addresses
below. It may not be modified without the written permission of the
authors. This primer is based on the Multimedia Law and Business Handbook
which is designed to provide accurate information on the legal issues in
multimedia. The primer is provided with the understanding that the authors
are not engaged in rendering legal services. If you have a legal problem,
you should seek the advice of experienced counsel.
An understanding of legal issues is essential to success in the multimedia
industry. Mistakes can cost the multimedia developer tens or even hundred
of thousands of dollars in legal fees and damages. For example, Delrina
lost hundreds of thousands of dollars and had to recall all of the copies
of its screen saver last fall when it lost a copyright suit. Delrina
distributed a screen saver in which one of the 30 modules showed the comic
book character Opus shooting down Berkeley Systems' "flying toasters"
(made famous in Berkeley's "After Dark" screen saver program). Berkeley
Systems sued Delrina for copyright and trademark infringement. The court
ruled for Berkeley Systems, prohibiting further distribution of Delrina's
product and requiring Delrina to recall all of the product not already
sold.
The copyright ownership dispute between two leading multimedia developers,
Michael Saenz and Joe Sparks, provides another example of the importance
of dealing properly with legal issues. The dispute focuses on whether Joe
was an employee or independent contractor of Reactor, Inc. (Mike Saenz's
company) when they developed the successful game "Spaceship Warlock." If
Joe was right in claiming that he was an independent contractor, he is
co-owner of the copyright and has a right to half of the profits from the
game. These profits could be worth hundreds of thousands of dollars. The
court did decide that Joe Sparks was a co-owner of the copyright and the
suit was later settled.
This primer will help you understand the legal issues in developing and
distributing multimedia and online works. It is based on the Multimedia
Law and Business Handbook (1996) from Ladera Press, which has been praised
by the Interactive Multimedia Association. This summary of the law should
not be viewed as "answering" most questions (the Multimedia Law and
Business Handbook discusses these issues in more detail in 320 pages and
includes twenty -two sample agreements to show how these issues are dealt
with in actual transactions) You can order the book by calling
800-523-3721 or faxing 810-987-3562.
Legal matters in multimedia are frequently complex and you should not rely
on the information in this primer alone. You should consult with
experienced counsel before making any final decisions.
OVERVIEW
There are four major intellectual property laws in the United States that
are important for multimedia developers:
• Copyright law, which protects original "works of authorship."
• Patent law, which protects new, useful, and "nonobvious" inventions
and processes.
• Trademark law, which protects words, names, and symbols used by
manufacturers and businesses to identify their goods and services.
• Trade secret law, which protects valuable information not generally
known that has been kept secret by its owner.
This primer will focus on U.S. copyright law because copyright law is the
most important of these laws for most multimedia developers and
publishers. The other three intellectual property laws are discussed in
less detail, as are several other relevant laws. The primer concludes
with a hypothetical which applies the laws discussed in the primer to a
fictitious multimedia project.
COPYRIGHT LAW
There are two reasons why it is important for you as a multimedia
developer or publisher to be familiar with the basic principles of
copyright law:
• Multimedia works are created by combining "content" - music, text,
graphics, illustrations, photographs, software - that is protected under
copyright law. Developers and publishers must avoid infringing copyrights
owned by others.
• Original multimedia works are protected by copyright. The
Copyright Act's exclusive rights provision gives developers and publishers
the right to control unauthorized exploitation of their works.
Copyright law is a federal law, and so the law does not vary from
state to state (although the interpretation of the law may be different in
different courts).
Basic Principles
This section summarizes the basic principles of copyright law,
including the types of works that are protected by copyright, how
copyright protection is obtained, and the scope of the protection.
Works Protected
Copyright protection is available for "works of authorship." The
Copyright Act states that works of authorship include the following types
of works which are of interest to the multimedia developer:
• Literary works. Novels, nonfiction prose, poetry, newspaper
articles and newspapers, magazine articles and magazines, computer
software, software manuals, training manuals, manuals, catalogs,
brochures, ads (text), and compilations such as business directories
• Musical works. Songs, advertising jingles, and instrumentals.
• Dramatic works. Plays, operas, and skits.
• Pantomimes and choreographic works. Ballets, modern dance, jazz
dance, and mime works.
• Pictorial, graphic, and sculptural works. Photographs, posters,
maps, paintings, drawings, graphic art, display ads, cartoon strips and
cartoon characters, stuffed animals, statues, paintings, and works of fine
art.
• Motion pictures and other audiovisual works. Movies,
documentaries, travelogues, training films and videos, television shows,
television ads, and interactive multimedia works.
• Sound recordings. Recordings of music, sounds, or words.
Obtaining Copyright Protection
Copyright protection arises automatically when an "original" work of
authorship is "fixed" in a tangible medium of expression. Registration
with the Copyright Office is optional (but you have to register before you
file an infringement suit, and registering early will make you eligible to
receive attorney's fees and statutory damages in a future lawsuit).
Here's what "original" and "fixed" mean in copyright law:
Originality: A work is original in the copyright sense if it
owes its origin to the author and was not copied from some preexisting
work.
Fixation: A work is "fixed" when it is made "sufficiently
permanent or stable to permit it to be perceived, reproduced, or otherwise
communicated for a period of more than transitory duration." Even copying
a computer program into RAM has been found to be of sufficient duration
for it to be "fixed" (although some scholars and lawyers disagree with
this conclusion).
Neither the "originality" requirement nor the "fixation" requirement is
stringent. An author can "fix" words, for example, by writing them down,
typing them on an old-fashioned typewriter, dictating them into a tape
recorder, or entering them into a computer. A work can be original
without being novel or unique.
Example: Betsy's book How to Lose Weight is original in the
copyright sense so long as Betsy did not create her book by copying
existing material - even if it's the millionth book to be written on the
subject of weight loss.
Only minimal creativity is required to meet the originality requirement.
No artistic merit or beauty is required.
A work can incorporate preexisting material and still be original. When
preexisting material is incorporated into a new work, the copyright on the
new work covers only the original material contributed by the author.
Example: Developer's multimedia work incorporates a number of
photographs that were made by Photographer (who gave Developer permission
to use the photographs in the multimedia work). The multimedia work as a
whole owes its origin to Developer, but the photographs do not. The
copyright on the multimedia work does not cover the photographs, just the
material created by Developer.
Scope of Protection
Copyright protects against copying the "expression" in a work, not against
copying the work's ideas. The difference between "idea" and "expression"
is one of the most difficult concepts in copyright law. The most important
point to understand is that one can copy the protected expression in a
work without copying the literal words (or the exact shape of a sculpture,
or the exact "look" of a stuffed animal). When a new work is created by
copying an existing copyrighted work, copyright infringement exists if the
new work is "substantially similar" to the work that was copied. The new
work need not be identical to the copied work.
A copyright owner has five exclusive rights in the copyrighted work:
• Reproduction Right. The reproduction right is the right to copy,
duplicate, transcribe, or imitate the work in fixed form.
• Modification Right. The modification right (also known as the
derivative works right) is the right to modify the work to create a new
work. A new work that is based on a preexisting work is known as a
"derivative work."
• Distribution Right. The distribution right is the right to
distribute copies of the work to the public by sale, rental, lease, or
lending.
• Public Performance Right. The public performance right is the
right to recite, play, dance, act, or show the work at public place or to
transmit it to the public. In the case of a motion picture or other
audiovisual work, showing the work's images in sequence is considered
"performance." Sound recordings - recorded versions of music or other
sounds - do not have a public performance right.
• Public Display Right. The public display right is the right to
show a copy of the work directly or by means of a film, slide, or
television image at a public place or to transmit it to the public. In the
case of a motion picture or other audiovisual work, showing the work's
images out of sequence is considered "display."
In addition, certain types of works of "visual art" also have "moral
rights" which limit the modification of the work and the use of the
author's name without permission from the original author.
Anyone who violates any of the exclusive rights of a copyright owner is an infringer.
Example: Developer scanned Photographer's copyrighted photograph,
altered the image by using digital editing software, and included the
altered version of the photograph in a multimedia work that Developer sold
to consumers. If Developer used Photographer's photograph without
permission, Developer infringed Photographer's copyright by violating the
reproduction right (scanning the photograph), the modification right
(altering the photograph), and the distribution right (selling the altered
photograph in his work).
A copyright owner can recover actual or, in some cases, statutory damages
(which can be as high as $100,000 in some cases) from an infringer. In
addition, courts have the power to issue injunctions (orders) to prevent
or restrain copyright infringement and to order the impoundment and
destruction of infringing copies.
The term of copyright protection depends on three factors: who created the
work, when the work was created, and when it was first distributed
commercially. For copyrightable works created on and after January 1,
1978, the copyright term for those created by individuals is the life of
the author plus 50 years. The copyright term for "works made for hire"
(see below) is 75 years from the date of first "publication" (distribution
of copies to the general public) or 100 years from the date of creation,
whichever expires first.
Generally, the copyright is owned by the person (or persons) who create
the work. However, if the work is created by employee within the scope of
his or her employment, the employer owns the copyright because it is a
"work for hire." The copyright law also includes another form of "work
for hire": it applies only to certain types of works which are specially
commissioned works. These works include audiovisual works, which will
include most multimedia projects. In order to qualify the work as a
"specially commissioned" work for hire, the creator must sign a written
agreement stating that it is a "work for hire" prior to commencing
development of the product. (Remember that this primer deals only with
United States law; most foreign jurisdictions do not recognize the
"specially commissioned" work for hire, and you need an assignment to
transfer rights in those countries).
Avoiding Copyright Infringement
Current technology makes it fairly easy to combine material created by
others - film and television clips, music, graphics, photographs, and text
- into a multimedia product. Just because you have the technology to copy
these works, that does not mean you have the legal right to do so. If you
use copyrighted material owned by others without getting permission, you
can incur liability for hundreds of thousands or even millions of dollars
in damages.
Most of the third-party material you will want to use in your multimedia
product is protected by copyright. Using copyrighted material without
getting permission - either by obtaining an "assignment" or a "license"-
can have disastrous consequences. An assignment is generally understood
to transfer all of the intellectual property rights in a particular work
(although an assignment can be more limited). A license provides the
right to use a work and is generally quite limited. A discussion of the
terms of licenses and assignments is beyond the scope of this primer (this
discussion takes up several entire chapters in our book).
If you use copyrighted material in your multimedia project without getting
permission, the owner of the copyright can prevent the distribution of
your product and obtain damages from you for infringement, even if you did
not intentionally include his or her material. Consider the following
example:
Productions, Inc. created an interactive multimedia training work called
You Can Do It. The script was written by a freelance writer. You Can Do
It includes an excerpt from a recording of Julie Andrews singing Climb
Every Mountain. It ends with a photograph of Lauren Bacall shown above
the words, "Good luck."
In this example, if the Productions staff did not obtain permission to use
the recording of Climb Every Mountain or the photo of Lauren Bacall, You
Can Do It infringes three copyrights: the copyright on the song, the
copyright on the Julie Andrews recording of the song, and the copyright on
the photograph. Productions is also infringing Lauren Bacall's right of
publicity (which is separate from copyright) by the commercial use of her
image. Furthermore, if Productions did not acquire ownership of the
script from the freelance writer, Productions does not have clear title to
Do It, and distribution of Do It may infringe the writer's copyright in
the script. Any of the copyright owners whose copyrights are infringed
may be able to get a court order preventing further distribution of this
multimedia product.
There are a number of myths out there concerning the necessity of getting
a license. Here are five. Don't make the mistake of believing them:
• Myth #1: "The work I want to use doesn't have a copyright notice
on it, so it's not copyrighted. I'm free to use it."
Most published works contain a copyright notice. However, for works
published on or after March 1, 1989, the use of copyright notice is
optional. The fact that a work doesn't have a copyright notice doesn't
mean that the work is not protected by copyright.
• Myth #2: "I don't need a license because I'm using only a small
amount of the copyrighted work."
It is true that de minimis copying (copying a small amount) is not
copyright infringement. Unfortunately, it is rarely possible to tell where
de minimis copying ends and copyright infringement begins. There are no
"bright line" rules.
Copying a small amount of a copyrighted work is infringement if what is
copied is a qualitatively substantial portion of the copied work. In one
case, a magazine article that used 300 words from a 200,000-word
autobiography written by President Gerald Ford was found to infringe the
copyright on the autobiography. Even though the copied material was only
a small part of the autobiography, the copied portions were among the most
powerful passages in the autobiography. Copying any part of a copyrighted
work is risky. If what you copy is truly a tiny and nonmemorable part of
the work, you may get away with it (the work's owner may not be able to
tell that your work incorporates an excerpt from the owner's work).
However, you run the risk of having to defend your use in expensive
litigation. If you are copying, it is better to get a permission or a
license (unless fair use applies). You cannot escape liability for
infringement by showing how much of the protected work you did not take.
• Myth #3: "Since I'm planning to give credit to all authors whose
works I copy, I don't need to get licenses."
If you give credit to a work's author, you are not a plagiarist (you are
not pretending that you authored the copied work). However, attribution
is not a defense to copyright infringement.
• Myth #4: "My multimedia work will be a wonderful showcase for the
copyright owner's work, so I'm sure the owner will not object to my use of
the work."
Don't assume that a copyright owner will be happy to have you use his or
her work. Even if the owner is willing to let you use the work, the owner
will probably want to charge you a license fee. Content owners view
multimedia as a new market for licensing their material.
In 1993, ten freelance writers sued the New York Times and other
publishers over the unauthorized publication of their work through online
computer services. And the Harry Fox Agency and other music publishers
have sued CompuServe, an online computer service, over the distribution of
their music on the service.
• Myth #5: "I don't need a license because I'm going to alter the
work I copy."
Generally, you cannot escape liability for copyright infringement by
altering or modifying the work you copy. If you copy and modify protected
elements of a copyrighted work, you will be infringing the copyright
owner's modification right as well as the copying right.
Special Myths about the Internet
Much public domain material is available on the Net government reports and
uncopyrightable factual information, for example. However, much of the
material that is on the Internet is protected by copyright.
In addition to the general copyright myths discussed above, there are a
number of myths about how copyright law applies to copying material from
the Internet and posting material on the Internet. We ll discuss some of
them in this section.
Copying Material from the Net
Don't make the mistake of believing these myths about copying material
from the Net:
Internet Myth #1: If I find something on the Net, it's okay to copy it and
use it without getting permission.
While you are free to copy public domain material that you find on the
Net, generally you should not copy copyrighted material without getting
permission from the copyright owner whether you find the material on the
Net or in a more traditional medium (book, music CD, software disk, etc.).
Internet Myth #2: Anyone who puts material on a Web server wants people to use that
material, so I can do anything I want with material that I get from a Web server.
Individuals and organizations put material on a Web server to make it accessible by others. They
do not give up their copyright rights by putting material on a Web server. Also, the person who posted the
material may not own it.
Internet Myth #3: It s okay to copy material from a Home Page or website without getting
permission.
Much of the material that appears in websites and Home Pages is protected by copyright. If you
want to use something from someone else s Home Page or website, get permission unless permission
to copy is granted in the text of the Home Page or website.
Posting Material
And don t believe these myths about how copyright law applies to putting copyrighted material owned
by others on the Net:
Internet Myth #4: It s okay to use copyrighted material in my Web site so long as no one
has to pay to visit my Web site.
Unless your use of the copyrighted work is fair use (see Fair Use, later in this article), you need
a license to copy and use the work in your website even if you won t be charging people to view your
website. (You also need a public display license.)
Internet Myth #5: It s okay to make other people s copyrighted material available on my
Web server so long as I don t charge people anything to get the material.
Copying and distributing copyrighted material without permission can be copyright infringement
even if you don t charge for the copied material. Making material available for others to copy can be
contributory infringement.
When You Don't Need a License
You don't need a license to use a copyrighted work in three circumstances: (1) if your use is fair
use; (2) if the work you use is in the public domain; or (3) if the material you use is factual or an idea.
Fair Use
You don't need a license to use a copyrighted work if your use is "fair use." Unfortunately, it is
difficult to tell whether a particular use of a work is fair or unfair. Determinations are made on a case-by-
case basis by considering four factors:
• Factor #1: Purpose and character of use. The courts are most likely to find fair use where
the use is for noncommercial purposes, such as a book review.
• Factor #2: Nature of the copyrighted work. The courts are most likely to find fair use
where the copied work is a factual work rather than a creative one.
• Factor #3: Amount and substantiality of the portion used. The courts are most likely to
find fair use where what is used is a tiny amount of the protected work. If what is used is small in amount
but substantial in terms of importance, a finding of fair use is unlikely.
• Factor #4: Effect on the potential market for or value of the protected work. The courts
are most likely to find fair use where the new work is not a substitute for the copyrighted work.
If your multimedia work serves traditional "fair use" purposes - criticism, comment, news reporting,
teaching, scholarship, and research - you have a better chance of falling within the bounds of fair use than
you do if your work is a sold to the public for entertainment purposes and for commercial gain.
Public Domain
You don't need a license to use a public domain work. Public domain works - works not protected
by copyright - can be used by anyone. Because these works are not protected by copyright, no one can
claim the exclusive rights of copyright for such works. For example, the plays of Shakespeare are in the
public domain. Works enter the public domain in several ways: because the term of the copyright
expired, because the copyright owner failed to "renew" his copyright under the old Copyright Act of 1909,
or because the copyright owner failed to properly use copyright notice (of importance only for works
created before March 1, 1989, at which time copyright notice became optional). The rules regarding what
works are in the public domain are too complex for this primer, and they vary from country to country.
Ideas or Facts
You don't need a license to copy facts from a protected work or to copy ideas from a protected
work. The copyright on a work does not extend to the work's facts. This is because copyright protection
is limited to original works of authorship, and no one can claim originality or authorship for facts. You
are free to copy facts from a copyrighted work.
Creating Your Own Works
Naturally, you don't need a copyright license for material which you create yourself. However,
you should be aware that the rules regarding ownership of copyright are complex. You should not assume
that you own the copyright if you pay an independent contractor to create the work (or part of it). In fact,
generally the copyright in a work is owned by the individual who creates the work, except for full-time
employees working within the scope of their employment and copyrights which are assigned in writing.
PATENT LAW
While copyright law is the most important intellectual property law for protecting rights in
multimedia works, a multimedia developer needs to know enough about patent, trademark, and trade
secret law to avoid infringing intellectual property rights owned by others and to be able to take advantage
of the protection these laws provide.
Works Protected
Patent law protects inventions and processes ("utility" patents) and ornamental designs ("design"
patents). Inventions and processes protected by utility patents can be electrical, mechanical, or chemical
in nature. Examples of works protected by utility patents are a microwave oven, genetically engineered
bacteria for cleaning up oil spills, a computerized method of running cash management accounts, and a
method for curing rubber. Examples of works protected by design patents are a design for the sole of
running shoes, a design for sterling silver tableware, and a design for a water fountain.
Obtaining Patent Protection
There are strict requirements for the grant of utility patents and design patents. To qualify for a
utility patent, an invention must be new, useful, and "nonobvious." To meet the novelty requirement, the
invention must not have been known or used by others in this country before the applicant invented it, and
it also must not have been patented or described in a printed publication in the U.S. or a foreign country
before the applicant invented it. The policy behind the novelty requirement is that a patent is issued in
exchange for the inventor's disclosure to the public of the details of his invention. If the inventor's work
is not novel, the inventor is not adding to the public knowledge, so the inventor should not be granted a
patent.
To meet the nonobviousness requirement, the invention must be sufficiently different from existing
technology and knowledge so that, at the time the invention was made, the invention as a whole would
not have been obvious to a person having ordinary skill in that field. The policy behind this requirement
is that patents should only be granted for real advances, not for mere technical tinkering or modifications
of existing inventions.
It is difficult to obtain a utility patent. Even if the invention or process meets the requirements of
novelty, utility, and nonobviousness, a patent will not be granted if the invention was patented or described
in a printed publication in the U.S. or a foreign country more than one year before the application date,
or if the invention was in public use or on sale in the U.S. for more than one year before the application
date.
Scope of Protection
A patent owner has the right to exclude others from making, using, or selling the patented
invention or design in the United States during the term of the patent. Anyone who makes, uses, or sells
a patented invention or design within the United States during the term of the patent without permission
from the patent owner is an infringer - even if he or she did not copy the patented invention or design or
even know about it.
Example: Developer's staff members, working on their own, developed a software
program for manipulating images in Developer's multimedia works. Although
Developer's staff didn't know it, Inventor has a patent on that method of image
manipulation. Developer's use of the software program infringes Inventor's patent.
Before June 8, 1995, utility patents were granted for a period of 17 years. After that date patents are
issued for the greater of 17 years after issuance or 20 years after filing. Design patents are granted for a
period of 14 years. Once the patent on an invention or design has expired, anyone is free to make, use,
or sell the invention or design.
Trademark Law
Trademarks and service marks are words, names, symbols, or devices used by manufacturers of
goods and providers of services to identify their goods and services, and to distinguish their goods and
services from goods manufactured and sold by others.
Example: The trademark Wordperfect is used by the Wordperfect Corporation to
identify that company's word processing software and distinguish that software from other
vendors' word processing software.
For trademarks used in commerce, federal trademark protection is available under the federal trademark
statute, the Lanham Act. Many states have trademark registration statutes that resemble the Lanham Act,
and all states protect unregistered trademarks under the common law (nonstatutory law) of trademarks.
Availability of Protection
Trademark protection is available for words, names, symbols, or devices that are capable of
distinguishing the owner's goods or services from the goods or services of others. A trademark that merely
describes a class of goods rather than distinguishing the trademark owner's goods from goods provided
by others is not protectible.
Example: The word "corn flakes" is not protectible as a trademark for cereal because
that term describes a type of cereal that is sold by a number of cereal manufacturers rather
than distinguishing one cereal manufacturer's goods.
A trademark that so resembles a trademark already in use in the U.S. as to be likely to cause confusion
or mistake is not protectible. In addition, trademarks that are "descriptive" of the functions, quality or
character of the goods or services must meet special requirements before they will be protected.
Obtaining Protection
The most effective trademark protection is obtained by filing a federal trademark registration
application in the Patent and Trademark Office. Federal law also protects unregistered trademarks, but
such protection is limited to the geographic area in which the mark is actually being used. State trademark
protection under common law is obtained simply by adopting a trademark and using it in connection with
goods or services. This protection is limited to the geographic area in which the trademark is actually
being used. State statutory protection is obtained by filing an application with the state trademark office.
Scope of Protection
Trademark law in general, whether federal or state, protects a trademark owner's commercial
identity (goodwill, reputation, and investment in advertising) by giving the trademark owner the exclusive
right to use the trademark on the type of goods or services for which the owner is using the trademark.
Any person who uses a trademark in connection with goods or services in a way that is likely to cause
confusion is an infringer. Trademark owners can obtain injunctions against the confusing use of their
trademarks by others, and they can collect damages for infringement.
Example: Small Multimedia Co. is selling a line of interactive training works under the
trademark Personal Tutor. If Giant Multimedia Co. starts selling interactive training
works under the trademark Personal Tutor, purchasers may think that Giant's works come
from the same source as Small Multimedia's works. Giant is infringing Small's
trademark.
Trade Secret Law
A trade secret is information of any sort that is valuable to its owner, not generally known, and
that has been kept secret by the owner. Trade secrets are protected only under state law. The Uniform
Trade Secrets Act, in effect in a number of states, defines trade secrets as "information, including a
formula, pattern, compilation, program, device, method, technique, or process that derives independent
economic value from not being generally known and not being readily ascertainable and is subject to
reasonable efforts to maintain secrecy."
Works Protected
The following types of technical and business information are examples of material that can be
protected by trade secret law: customer lists; instructional methods; manufacturing processes; and
methods of developing software. Inventions and processes that are not patentable can be protected under
trade secret law. Patent applicants generally rely on trade secret law to protect their inventions while the
patent applications are pending.
Six factors are generally used to determine whether information is a trade secret:
• The extent to which the information is known outside the claimant's business.
• The extent to which the information is known by the claimant's employees.
• The extent of measures taken by the claimant to guard the secrecy of the information.
• The value of the information to the claimant and the claimant's competitors.
• The amount of effort or money expended by the claimant in developing the information.
• The ease with which the information could be acquired by others.
Information has value if it gives rise to actual or potential commercial advantage for the owner of the
information. Although a trade secret need not be unique in the patent law sense, information that is
generally known is not protected under trade secrets law.
Obtaining Protection
Trade secret protection attaches automatically when information of value to the owner is kept
secret by the owner.
Scope of Protection
A trade secret owner has the right to keep others from misappropriating and using the trade secret.
Sometimes the misappropriation is a result of industrial espionage. Many trade secret cases involve people
who have taken their former employers' trade secrets for use in new businesses or for new employers.
Trade secret owners have recourse only against misappropriation. Discovery of protected information
through independent research or reverse engineering (taking a product apart to see how it works) is not
misappropriation.
Trade secret protection endures so long as the requirements for protection - generally, value to the
owner and secrecy - continue to be met. The protection is lost if the owner fails to take reasonable steps
to keep the information secret.
Example: After Sam discovered a new method for manipulating images in multimedia works,
he demonstrated his new method to a number of other developers at a multimedia conference.
Sam lost his trade secret protection for the image manipulation method because he failed to keep
his method secret.
RIGHTS OF PUBLICITY, LIBEL AND OTHER LAWS
In addition to the intellectual property laws discussed above, you must also be familiar with the
several other areas of law that deal with the right of the individual to control his image and reputation.
The right of publicity gives the individual the right to control the use of his name, face, image or voice for
commercial purposes. For example, Ford's advertising agency tried to persuade Bette Midler to sing during
a Ford television commercial. She refused. They hired her backup singer. The performance of the backup
singer was so similar to Bette Midler that viewers thought Bette Midler was singing. On the basis of that
confusion, she sued and won $400,000 in damages.
Libel and slander protect an individual against the dissemination of falsehoods about that
individual. To be actionable, the falsehood must injure his or her reputation or subject them to hatred,
contempt or ridicule. The individual can obtain monetary losses as well as damages for mental anguish.
If you intend to use pre-existing material from television or film, you may also have to deal with
the rights of members of the entertainment unions to get "reuse" fees. These unions include the Writers
Guild, the Directors Guild, the Screen Actors Guild, American Federation of Musicians, and the
American Federation of Television and Radio Artists. Under the union agreements with the film and
television studios, members of these unions and guilds who worked on a film or television program have
a right to payment if the work is reused. This topic is discussed in more detail in our book. Although you
as the multimedia developer are not signatory to these agreements and may not be directly liable for these
payments, the license from the film and television studio will generally make you responsible for paying
them. These payments are generally modest. However, if you are using many clips these payments can
become quite expensive.
If you use professional actors, directors, or writers in developing your product, you will also need
to deal with these unions. Most of the unions have very complex contracts developed specifically for
their traditional film and television work. They are still trying to understand how to deal with the
multimedia industry, although both SAG and AFTRA have developed a special contract for multimedia
projects. You should be aware that if you use professional talent, you should be prepared for the
additional complexity arising out of these union agreements.
HYPOTHETICAL MULTIMEDIA CD-ROM AND WEBSITE
This section will apply the legal rules just discussed to the creation and distribution of a new
multimedia work based on a retrospective of the Academy Awards. The work is being created by a new
company, Hollywood Productions. Its intended market is individuals and film students. It will be
distributed on a CD-ROM and as a website. The work, in addition to "story" text created by Hollywood
Productions and video footage which it shot at the Academy Awards ceremony, will consist of the
following elements:
Magazine articles about the winning movies and excepts from various books
about the awards and the film industry, including Final Cut, Reel Power, and
History of American Film.
Still photographs.
Excerpts from winning motion pictures.
Music, including some of the hit songs from the winning motion pictures.
A. TEXT WORKS.
From a legal point of view, the "story" text created by Hollywood Productions is treated differently
from the magazine articles and book excerpts. As the creator of the new text, Hollywood Productions will
probably own the copyright in the text, either through the work-for-hire doctrine or assignments.
For the magazine articles and book excerpts, however, Hollywood Productions is most likely not
the copyright owner. Hollywood Productions must go to the owners of the copyrights in the articles and
books to get permission to use the articles and book excerpts. (How to do this is discussed in more detail
in our book.)
B. PHOTOGRAPHS.
Copyrights in photographs are initially owned by the photographer, although they may either be
assigned to another party or transferred to the photographer's employer under the work-for-hire doctrine.
The determination of who owns the appropriate rights in the photograph can be very difficult and time
consuming because of fragmentation in this industry. For example, the fact that a photograph appeared
in the Forbes does not necessarily mean that the Forbes owns the copyright in the photograph. Forbes may
only have a license to use it once in its magazine. Common limitations in the licensing of photographs
include the color of reproduction, the medium (i.e. newspapers, magazines, etc.), and attribution as well
as those relating to numbers of copies.
The rights required for an interactive multimedia work would be quite different from those which
are normally granted to use photographs. For example, the photograph may appear several times
throughout the work and the number of its appearances could be controlled by the viewer. Such flexibility
is quite different from the rights traditionally granted in the photography industry.
C. FILM AND VIDEO.
Once again, Hollywood Productions must distinguish between film or video which it has created
(the footage which it shot at the Awards ceremony) and film or video owned by third parties (the excerpts
from the winning motion pictures).
As to the material it created, the Awards ceremony footage, if the legal issues are properly
structured, Hollywood Productions owns the copyright. The "authors" of a videotape may include the
actors, directors, scriptwriters, music composers and the cameramen. To avoid the problems of joint
ownership of copyright, Hollywood Productions should obtain the appropriate agreements from the
individuals involved in creating its videotapes. Even if Hollywood Productions owns the copyright in
the footage of the Awards ceremony, the use of the videoclips from the ceremony may require multiple
clearances, including clearing the music used in the videoclip, paying reuse fees to the entertainment
unions such as SAG and Directors Guild, and clearing the rights of publicity of the participants. In
addition, if Hollywood Productions uses "scripted" performances from the Awards ceremony, it will have
to pay reuse fees to the writers if they are members of the Writers Guild.
Hollywood Productions must obtain permission to use the excerpts from the winning motion
pictures. The use of feature films in multimedia can be particularly complex and expensive and generally
requires multiple permissions. Feature films are frequently based on a novel whose use is licensed to the
studio. The film may also use music developed by a third party. Consequently, the owner of the copyright
in the film may not have the necessary rights to the music or the underlying novel to permit their use in
the multimedia work. Union reuse fees may also apply. Hollywood Productions may also have to obtain
rights of publicity releases from the individual actors depending on their contract with the studio.
D. MUSIC.
To use music in the new work, Hollywood Productions must get permission from the
owners of the copyrights in the songs. Musical composition copyrights are usually owned by music
publishers.
If Hollywood Productions wants to use excerpts of existing recordings of music - from the
recorded sound tracks of the winning films, for example - it must get permission from owners of the
copyrights in those sound recordings, in addition to getting permission from the song copyright owners.
A sound recording copyright covers the expression added by the record developer in creating the recording
- the way the song is sung or played, the arrangement, the mixing, and so on. Sound recording copyrights
are generally owned by record companies.
If Hollywood Productions will be recording its own version of each song, this second level of
permission - permission to use an excerpt from a copyrighted sound recording - is inapplicable.
Rights in music are quite complicated. The rights which Hollywood Productions must consider
obtaining are described below:
. 1. Mechanical rights. Mechanical rights are the basic right to use a musical
composition. They do not include the right to publicly perform the music (see
below). A mechanical license also does not permit the use of the music with still
or moving images. Such use requires a "synchronization" license (see below).
Although copyright law provides a compulsory license for mechanical rights,
most licensees prefer to obtain these rights commercially through the Harry Fox
Agency or other similar agencies. This preference is based on the very onerous
payment and accounting requirements imposed by the Copyright Act for
"compulsory" licenses.
. 2. Synchronization license. If the music is to be synchronized with still or
moving images on a screen, the licensee must obtain a "synchronization" license.
Although these rights may also be handled by the Harry Fox Agency, in some
cases Hollywood Productions may need to contact the musical publisher directly.
. 3. Public performance rights. Hollywood Productions will probably also
need a license for public performance because its multimedia work will be shown
to students and other audiences. Such a showing would be considered a public
performance. A performance is considered public if it is "open to the public" or
at any place where a substantial number of persons outside of the "normal circle
of family and social acquaintances" gather. Most music publishers permit either
ASCAP or BMI to license their public performance rights (Harry Fox Agency
does not handle the public performance right). .
. 4. Right to a particular performance or recording. As described above, if
Hollywood Productions wants to use an excerpt from a particular recording of a
song, it must get permission from the owner of the sound recording copyright.
The licenses described in 1 through 3 are limited solely to the right to use the
musical composition. Thus, unless Hollywood Productions is prepared to have
new artists record the music, it must negotiate with the holder of the rights to the
particular recording (a record company, most likely).
Special Website Issues
The use of these materials on a website poses a number of special issues. First, the licenses of third
party rights would have to be worldwide in scope because of the international nature of the Internet. It
may be difficult to obtain such broad rights, because they may be owned by different parties. For example,
many book publishers exclusively license or assign copyrights to different companies for distribution in
different countries. Consequently, you would have to obtain clearances from several different companies
for a single work. Second, you will need to license public display rights for text and photographs and
public performance for video clips and music. You generally don't need those rights for a CD-ROM
because it is used in the privacy of a home, although you would need public performance rights to
demonstrate the CD-ROM at trade shows. You would also need to license such rights if the CD-ROM
is to be used in a school or company where the audience will be not be limited to family and friends.
The creation of a website, just like developing a CD-ROM, requires careful attention to the legal
as well as the technical aspects of the development. The online industry is so new that it has few or no
traditions of the roles of the parties. The development contract needs to address the following issues:
ownership of the copyright and other rights in the completed website, responsibility for the website design,
definition of milestones in development process, definition of website performance specifications, method
for confirming that the website meets the performance specifications, responsibility for licensing third
party software, liability for the failure of the website to perform in accordance with the specifications,
the responsibility for continuing performance and updating the website, method and timing of payment,
remedies for failure to perform and liability for infringement of third party rights.
CONCLUSION
An understanding of legal issues is critical to success in the multimedia and online industry. These issues
are complex because of the youth of the industry and the many industries upon which it draws to create
its products. The Multimedia Law and Business Handbook, which has been praised by the Interactive
Multimedia Association, provides a guide to these issues.
Biographies
J. Dianne Brinson has a Bachelor of Arts in Political Science and Russian, summa cum laude, from Duke
University and a law degree from Yale Law School. She teaches the "Law for Internet Users" at San Jose
State University's Internet Institute. She is also the author of a number of articles in the intellectual
property field and is a former member of the Executive Committee of the Intellectual Property Section of
the State Bar of California. She has practiced law at firms in Los Angeles and Atlanta. She is a former
tenured law professor at Georgia State University and has taught at Golden Gate Law School and Santa
Clara School of Law. She is now in private practice as a consultant in Menlo Park, California. She may
be reached at laderapres@aol.com.
Mark F. Radcliffe is a partner in the law firm of Gray Cary Ware & Freidenrich in Palo Alto (formerly
Ware & Freidenrich). He has been practicing intellectual property law, with a special emphasis on
computer law, for over ten years, and has been chairman of the Computer Law Section of the Bar
Association of San Francisco and the Computer Industry Committee of the Licensing Executives Society.
He is a member of the Multimedia Law Group at Gray Cary Ware & Freidenrich and represents many
multimedia developers and publishers. He has spoken on multimedia legal issues at the AAP, National
Association of Broadcasters annual convention, Game Developer s Workshop, Seybold San Francisco,
and IEEE. He has a Bachelor of Science in Chemistry, magna cum laude, from the University of
Michigan, and a law degree from Harvard Law School. He has been quoted in the New York Times, Wall
Street Journal and the San Francisco Examiner on legal issues and multimedia. He can be reached at
mradcliffe@gcwf.com.
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you have a legal problem, you should seek the advice of experienced counsel.