Property Law Primer for Multimedia Developers

by J. Dianne Brinson and Mark F. Radcliffe

NOTE : As we go back through the archives of the Design Center we find some articles worth saving. Most are deleted. This article was published with authors' permissions in promotion for their book Multimedia Law Handbook. It was published in 1994 -- only the styling has been updated -- the original file now deleted.

PROPERTY LAW PRIMER FOR MULTIMEDIA DEVELOPERS 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.

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.

Two leading multimedia developers, Michael Saenz and Joe Sparks have been in court since the fall of 1993 in a dispute about the ownership of the copyright in their successful game, Spaceship Warlock. The dispute focuses on whether Joe was an employee or independent contractor of Reactor, Inc. (Mike Saenz's company) when they developed the game. If Joe is 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 millions of dollars.

This primer will help you understand the legal issues in developing and distributing multimedia works. It is based on the Multimedia Law Handbook from Ladera Press, which has been endorsed by the Interactive Multimedia Association*. This summary of the law should not be viewed as "answering" most questions. 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. Multimedia products require a knowledge of the four major forms of intellectual property as well as the laws governing rights of publicity, defamation and libel.

Major Intellectual Property Laws in the United States

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. 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 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 as opposed to the idea of the work. The difference between "idea" and "expression" is one of the most difficult concepts in copyright law. The most important point to understand is that the protection of the "expression" is not limited to exact copying either of the literal words of a novel or the shape of stuffed bear. Copyright infringement extends to new works which are "substantially similar".

  • 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." Some types of works, such as sound recordings, 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 (please note 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).

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