AN INTELLECTUAL PROPERTY LAW PRIMER FOR MULTIMEDIA DEVELOPERS

Copyright 1994 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 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.

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 is 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 Developers Workshop, SeyboldSan 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 
is the author of the chapter on legal issues in the National Association 
of Broadcasters book Multimedia 2000. 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.
	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 coowner 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.  

	This primer will help you understand the legal issues in developing 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  (the Multimedia Law Handbook discusses these issues in more detail in 340 pages and includes eighteen sample agreements to show how these issues are dealt within  actual 
transactions; you can order the book by calling 8005233721). 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.   

	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 oldfashioned 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). 

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.  The technical ease of copying these works does not give you 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 thirdparty 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.  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. An assignment is generally 
understood to transfer all of the intellectual property rights in a 
particular work, although an assignment can be more limited in scope. 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; it requires several entire chapters in the 
Multimedia Law Handbook. 



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 200,000word 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.  

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 caseby
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  the heart of the copied 
work  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: the term of  the copyright may have expired, the copyright 
owner may have failed to "renew" his copyright under the old Copyright 
Act of 1909, or the copyright owner may have 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 fulltime 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 nonobvious 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.

Utility patents are granted for a period of 17 years.  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 have special requirements before they 
will be protected.

Obtaining Protection

	The most effective trademark protection is obtained by filing a 
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 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 preexisting material from television or film, you may also have to deal with the rights of  entertainment unions to "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. 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 generally makes you responsible for 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 WORK.

	This section will apply these legal rules 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 laser disk.  The work will consist 
of the following elements:

		 	Videoclips from the Academy Award ceremonies.
		 	Magazine articles about the winning movies.
		 	Excepts from various books about the awards  and the film industry, including Final Cut, Reel Power, and History of American Film.
		 	Software to permit access to the material in numerous ways.
		 	Still photographs.
		 	Film clips of news programs and excerpts from winning  motion pictures.
		 	New video works created by Hollywood Productions to explain basic film industry concepts.
		 	Music, including some of the hit songs from  the winning motion pictures.

	A.	TEXT WORKS AND COMPUTER SOFTWARE.

		The magazine articles, the excerpts from the pre-existing books and the computer software may be treated differently from a legal point of view.  Hollywood Productions is creating the new text and the 
computer software.  As the creator, it will probably own the copyright 
in those elements, either through the work-for-hire doctrine or 
assignments.  

	On the other hand, Hollywood Productions must go to the owners of the copyrights, or licensees of the copyrights, in the magazine articles (or perhaps the authors of the articles) and books to obtain the rights to use these materials in its work.  

	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 CLIPS AND VIDEOS.

		Once again, Hollywood Productions must distinguish between video which it has created (for which, if the legal issues were properly 
structured, it will own the copyrights) and those for which it needs to 
obtain rights.  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 who are 
creating its videotapes. The use of the videoclips from the ceremony may 
require multiple clearances including clearing the music used in the 
videoclip, obtaining the license from the copyright  owner, 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 the "scripted" performances, it will have to 
pay reuse fees to the writers if they are members of the Writers Guild. 

	D.	NEWS PROGRAMS AND OTHER STOCK FILM.

		Stock footage is available from "stock houses" in many cities.  Materials available from stock houses range from historical footage of various locations to commercials.  Other institutions, such as television stations, may also license their newscasts.  These 
institutions generally base their royalty on the type of use of the 
film.  For example, different royalties are due for use on national 
television or regional television.  Since the multimedia work would not 
fit easily into any of these categories, Hollywood Productions would 
probably have to negotiate a special license with these institutions.

	E.	FEATURE FILMS.

		The use of feature films can be particularly complex and 
expensive.  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.   This situation is further 
complicated by provisions of the various motion picture industry guild 
agreements (such as the Screen Actors Guild and the Directors Guild of 
America) which require payment of fees upon incorporation of parts or 
portions of the film into another work.  Hollywood Productions may also 
have to obtain rights of publicity releases from the individual actors 
depending on their contract with the studio.

	F.	MUSIC.

	 	To use music in the new work, Hollywood Productions may require obtaining rights from several different parties.  The rights necessary depend on whether or not Hollywood Production records the music itself or wishes to use the performance of a third party.  Since the music will frequently be sound tracks from a particular motion picture, Hollywood Productions will need to clear the rights to particular performances of the music. 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 on the "compulsory" license in the Copyright Act.

		 .	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.  These rights do not apply to a particular 
performance by a particular individual or group to use the particular 
recording of a performance of the musical composition.  Thus, obtaining 
a mechanical license to "Yesterday" would not permit Hollywood 
Productions to use the Beatle's performance of the song.

		 .	4.	Right to a particular performance or recording.  As described above, if Hollywood Productions desires the musical composition to be performed by a particular group or individual, it must also obtain the right of the copyright holder in that particular performance.  The licenses described above 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 performance which it desires to use.  These rights are generally held by record companies.

CONCLUSION

An understanding of  legal issues is critical to success in the 
multimedia 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 Handbook,  which has been 
endorsed by the Interactive Multimedia Association, provides a guide to 
these issues.

NO RISK GUARANTEE! The Multimedia Law Handbook comes with a 30 day 
money back guarantee! If you are not completely satisfied, just return the book for a full refund. The Multimedia Law Handbook is only $74.95 (plus $4 for shipping and handling). The contract diskette is $29.95 . CA residents need to add 8.25% sales tax. You can order by phone (Visa and MasterCard accepted) by calling 8005233721. You can order by fax (please include your Visa or MasterCard number and its expiration date) by sending this form to (810) 9873562. Or you can send this form by mail to:  Ladera Press, c/o RLS Associates, P.O. Box 5030, Port Huron, MI 480615030. Discounts  for  associations and bulk orders are available; please contact: Ladera Press,  3130 Alpine Road, Suite 2009002, Menlo Park, CA 94025.
LICENSE NOTICE:  This article may be copied in its entirety for 
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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 
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of the authors. This primer is based on the Multimedia Law 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.


