MULTIMEDIA CONTENT AND THE SUPER HIGHWAY:
RAPID ACCELERATION OR FOOT ON THE BRAKE?

FRED GREGURAS(1)
MICHAEL R. EGGER(1)
SANDY J. WONG(2)

Table of Contents

I.   Rights Issues in Multimedia Content
       A. Ownership May Not be Enough
       B. General Rights Issues
       C. Use of Literary and Other Written Works
       D. Use of Photographs
       E. Use of Film Clips
       F. Use of Music Works
II.  Importance of Patent Issues
III. Related Activities in Japan
       A. Institute of Intellectual Property Report
       B. Agency for Cultural Affairs Report
IV.  The U.S. Multimedia Clearinghouse:  A Proposal
       A. Overview
       B. Coalition Support Needed
       C. Management and Administration
V.   Conclusion

------------------------------------------------------------------------
1. Law firm of Fenwick & West, Two Palo Alto Square, Suite 800,
   Palo Alto, CA 94306;
   Tel. No. (415) 494-0600; Fax No. (415) 424-0859;
   Internet: fmg@fwpa.com/mre@fwpa.com

2. Sandy Jane Wong, M.P.A., Two Ohlone, Portola Valley, CA 94028;
   Tel. No. (415) 851-7233;
   Internet:  sandy@starwave.batnet.com
------------------------------------------------------------------------

A different type of highway builder may take us into the interactive 
future.  News, entertainment, education and other productions are ready 
at the on-ramp and may eventually be carried across the U.S. by the 
information super highway network.  Many of the productions will contain 
numerous and diverse digitized works, e.g., software, motion pictures, 
video, graphics, music and photographs.  Intellectual property rights, 
particularly copyright, are critical to the creation of productions or 
titles that contain such multimedia content.  Currently, in many 
instances, pre-existing works are not used in such content because 
obtaining such rights is costly and time-consuming.  The greatest 
creativity and ultimate value in multimedia products will likely come 
from new creativity combined with the creativity of pre-existing works.

This paper summarizes the copyright and licensing issues involved in 
creating multimedia content, describes activities in Japan with respect 
to such issues, and proposes a U.S.  multimedia clearinghouse.  There is 
no U.S.  clearinghouse for identifying who can authorize the right to 
use copyrighted content in a multimedia product.  Eventually, such a 
voluntary clearinghouse could be a "one-stop" license shopping center 
where the content user pays a specified fee for a set of rights.  The 
clearinghouse could provide a means to fairly compensate the owner of 
the pre-existing work while making it easier to secure license rights to 
such work.

The U.S. appears to have an initial worldwide, competitive advantage in 
multimedia productions and titles because of its lead in market-driven 
creativity in software, particularly in mass-market application software 
that fills a market need.  For example, one key competitor, Japan, is 
weak in mass- market application software other than video game 
software.  The availability or non-availability of a clearinghouse could 
increase the U.S. competitive advantage or provide the opportunity for 
others to catch up.


I. RIGHTS ISSUES IN MULTIMEDIA CONTENT

A. "Ownership" May Not be Enough

Even the outright purchase of a portfolio of works, such as motion 
pictures, may not provide the right of unrestricted use of the contents 
of such works in multimedia products.  An assignment of all right, title 
and interest in a copyrighted work, i.e., a transfer of ownership, may 
leave residual rights to be dealt with such as:

-- Moral rights such as the right to prevent changes to a work that 
could harm the author's reputation or honor.  In the U.S., the Visual 
Artists Rights Act, 17 U.S.C.  106A, provides protection for moral 
rights for works of fine art only - paintings, drawings, some 
photographs.  Moral rights in other countries are a more significant 
restriction on the use of content material.

-- Payments may be required for reuse rights under production agreements 
or union contracts.

-- Music sound track rights are a property separate from a movie itself.


B. General Rights Issues

The general legal rule in copyright licensing is to assume that any 
right not expressly granted in the license language is reserved by the 
owner.  Thus, if a specific right is not granted, you should assume you 
do not have it.  If the right is needed it should be expressly included 
in the license language.  The commercial rights needed for multimedia 
content may include copying, in whole or part; performance rights; 
public display rights; the preparation of derivative works 
(modifications); and publication and distribution by any variety of 
methods on all media whether now known or invented hereafter.  Use as 
multimedia content may be only a portion of the original work or require 
changes to the original work.  For example, in the case of a photograph, 
the entire work could be used while only an extract of the text of a 
book would likely be used.

Multimedia content use is not clearly covered in many existing 
traditional rights agreements such as publishing agreements.  These 
imprecise agreements can be a source of litigation, as illustrated by a 
recent lawsuit.  Ten freelance writers, backed by the National Writer's 
Union, filed suit in federal court against the N.Y. Times, Time Inc., 
Newsday, and two electronic publishers in December 1993 alleging that 
certain articles by the writers were made available on an on- line 
service and published on CD-ROMs without authorization or added 
compensation, Tasini v. NY. Times, 93-8678 (S.D. N.Y.).  At a minimum, 
this case is causing a refocus on electronic rights in publishing 
agreements.

It is not always clear who owns rights in pre-existing copyrighted 
works.  It is also dangerous to assume that a work is in the public 
domain.  There is no U.S. clearinghouse for identifying who can 
authorize the right to use copyrighted content in a multimedia product.  
There is no required copyright registration system in the U.S. or 
elsewhere in the world so the absence of a registration in a centralized 
recording system, such as the U.S. Copyright Office, is not conclusive 
in terms of identifying owners.  In addition, since March 1989, there 
has been no requirement in the U.S. to put a copyright notice on a 
published work as a condition of protection.  Copyright protection 
arises when a work is fixed in any tangible medium of expression.  
17.U.S.C.  102(a).  This has long been the case in most other 
countries.  As a result, the fact there is no copyright registration for 
a work or that the work has no copyright notice, provides no assurance 
that the work is in the public domain.  Use of such a work, without 
identifying and obtaining a license from the owner, may result in 
copyright infringement.  The result is that the contents of many current 
multimedia products have been created as original works.

"Fair use" is a possible defense to copyright infringement but is 
unlikely to be available in a commercial transaction.  17 U.S.C.  107.  
Fair use generally is limited to the private, noncommercial or 
educational use of a copyrighted work.  Fair use is determined on a 
case-by-case basis and is based on an assessment of factors including 
the amount of the copyrighted material that is used and whether such use 
can potentially harm the copyright owner's market.  For example, the 
fair use defense may be available for the personal use of copyrighted 
material but not for a commercial distribution of a multimedia work 
which contains part of a pre-existing work.

Privately-owned rights clearance agencies are available to attempt to 
identify the owner of a pre-existing work and negotiate a license on a 
work-by-work basis.  Traditional license and fee schedules probably will 
not fit multimedia content usage because of the nonsequential nature of 
many such works.  For example, there could be a branch back to a 
photograph with background music any number of times in the presentation 
of the content.

Content providers known as "stock houses" and media libraries are an 
alternative to obtaining the rights to specific works through rights 
clearance agencies.  The "stock houses" maintain libraries of video 
clips, photographs, illustrations, music and sound effects that can be 
licensed for use in a multimedia product.


C. Use of Literary and Other Written Works

The owner of a work has the following exclusive rights under the U.S. 
Copyright Act: copying, preparing derivative works (making 
modifications), distribution and for specified categories of works, 
public performance and public display rights.  17 U.S.C. 106.  No one 
else may exercise these rights without authorization of the owner.

The Copyright Clearance Center, Inc. ("CCC") was established primarily 
to protect the rights of owners of printed materials against 
unauthorized photocopying.  The CCC collects and distributes royalties 
to publishers.  The CCC has also begun to address the electronic use of 
printed works protected by copyright.  Thus, the CCC could be a 
candidate for the administrator of the multimedia clearinghouse 
discussed below.

A publisher of a book may hold rights only to publish the work in its 
original hard copy form.  The publisher may not have the right to 
publish it a second time, let alone authorize its use as multimedia 
content.  A license from the author may be needed in order to use any 
part of it as multimedia content.  The "electronic rights" and other 
specific provisions of the publishing agreement are key.


D. Use of Photographs

A book may also contain photographs of interest to the developer of a 
multimedia product.  A publisher of a work that contains a photograph 
may have only a one-time use right rather than outright ownership of the 
photograph.  The publication agreement may also impose additional 
restrictions on use of the photograph: minimum size, resolution, number 
of copies, time period, etc.  Thus, a developer of a multimedia product 
may need to negotiate with the photographer to obtain rights to the 
photograph.  The "stock house" may be an effective alternative for 
photographs in some cases.  Fees still must be negotiated for the 
specific type of multimedia usage.

The American Society of Media Photographers has established a Media 
Photographers Copyright Agency to protect its member photographers' 
works, which they license specifically for electronic reproduction.  
This is part of the trend for rights owners to establish collective 
organizations to monitor possible infringements and sometimes help 
finance litigation against infringements.

A recently filed lawsuit illustrates an important copyright issue 
relating to photographs.  In February 1994, a stock photography agency 
filed a $1.4 million lawsuit against New York Newsday for copyright 
infringement involving image sampling.  The plaintiff, FPG 
International, which has a portfolio of stock photos available for 
licensing, asserted that Newsday scanned photos from an FPG catalog, and 
then electronically "sampled" parts of the images for use in a cover 
photo illustration.  According to the complaint, because Newsday, an FPG 
customer, did not seek a license, its front-page photo illustration was 
an unauthorized derivative work of the copyrighted photographs.


E. Use of Film Clips

Films and related works are loosely divided into motion pictures and 
other films.  Film libraries other than commercial motion pictures often 
have fee schedules for traditional uses of content.  The problem is that 
multimedia products generally do not fit into traditional uses.  Thus, 
special negotiations may be required to cover the exact usage in the 
multimedia product.

The use of commercial motion picture footage is more complicated and 
expensive, assuming that rights can be acquired at all.  A film 
distributor probably does not have the authority to grant multimedia 
content rights but could be helpful in identifying who has such 
authority.  Use of any music rights, names and likenesses of 
actors/actresses in such content will require separate authorizations 
and payment of additional fees.  Multimedia content use is not likely to 
be part of a normal fee schedule so fees will probably have to be 
individually negotiated.


F. Use of Music Works

Music encompasses a number of different licensing rights.  The good news 
is that procedures and policies for obtaining rights to use a musical 
composition are well established.  It is also usually clear who owns the 
rights being sought.  The bad news is that one normally has to negotiate 
with several different parties to obtain all needed rights for use as 
multimedia content.

-- A mechanical license is needed for the right to make and distribute 
material objects in which a recording of a musical composition is 
embodied such as a record, tape or CD.  This license is authorization 
only from the composer of the work, not the performer.  A compulsory 
mechanical license is generally available under the U.S. Copyright Act, 
17 U.S.C.  115.

-- A synchronization license is needed to authorize the synchronization 
of a musical composition with visual images of a multimedia work.  No 
compulsory license is available for this right.  Rights must be obtained 
through a clearing agency.  Most synchronization licenses limit the 
number of seconds the composition can be used in a work.  Because 
multimedia works are not sequential, a composition could be played many 
times in a given use.  Thus, again, multimedia content does not fit into 
traditional fee schedules.

-- Another exclusive right of the owner of a musical composition is to 
control public performances.  17 U.S.C.  106(4).  A multimedia product 
may need a public performance license.  Some licenses are available from 
ASCAP and BMI which are discussed below.

-- A master recording license is needed for the right to use a 
particular performance of a specific artist of the underlying 
composition.  No compulsory license is available for this right.

The two major performing rights organizations, the American Society of 
Composers, Authors & Publishers ("ASCAP") and Broadcast Music 
Incorporated ("BMI") only grant public performance licenses, i.e., the 
rights to perform a copyrighted musical work in public.  Neither of 
these organizations grants rights to use such works in multimedia 
products.  There is one special clearance agency, the Harry Fox Agency 
("HFA"), which is a clearinghouse for obtaining music rights.  HFA 
reportedly provides licensing and royalty collection services to over 
12,000 music principals, which is a substantial amount of the music 
rights in the U.S.

The first apparent lawsuit involving music available through a network 
is illustrative of the copyright issues and also of a general legal 
issue which the super highway administrator must face.  Late last year, 
Frank Music Corp.  filed a class action copyright infringement lawsuit 
against CompuServe in federal court in New York.  The suit, filed on 
behalf of over 140 music publisher- principals of HFA and backed by the 
National Music Publishers' Association, alleges copyright infringement 
of Frank Music's works composition "Unchained Melody," and more than 500 
musical compositions owned by HFA's other principals.

CompuServe offers a computer-based on-line information and electronic 
communication service.  Subscribers can "upload" literary, graphic and 
musical works for storage in databases and also "download" such works.  
CompuServe was sued on the basis that its maintenance of the bulletin 
board from which musical compositions in the form of "MIDI files" are 
"uploaded" and "downloaded" constitutes copyright infringement.  MIDI 
files are computerized information -- usually an arrangement of a 
popular song -- that can be played through a musical synthesizer.  The 
complaint claims that CompuServe has control over the nature and content 
of materials and knew or should have known the nature and content of 
materials stored and downloaded.

MIDI/Music Forum is one of about 1,700 bulletin board services carried 
but not owned or managed by CompuServe.  Such services are owned and 
managed by third parties from whom CompuServe obtains warranties against 
copyright infringement.  The Forum's manager reportedly stated that 
subscribers who place songs into the database have been warned that they 
must have the legal right to do so.

CompuServe could be liable for approximately $70 million in damages and 
costs.  The complaint also requests preliminary and permanent 
injunctions against further infringement; an order requiring CompuServe 
to purge the MIDI files during the pendency of this dispute; that 
CompuServe deliver for destruction all articles and devices in its 
possession from which infringing copies of the works can be made; and 
costs and attorneys' fees.

CompuServe argues that it is not responsible for any infringements 
because the Music Forum is managed by a third party.  This argument does 
not address CompuServe's possible contributory infringement liability.  
CompuServe's position is that, when information is being provided at the 
price of a magazine subscription, you cannot review and censor such 
information, and that any copying or distribution originates with 
subscribers.  CompuServe cites a 1991 federal court ruling which held 
that CompuServe was a distributor rather than a publisher with the 
result that CompuServe had no duty to screen a database for defamatory 
statements and was not liable for such statements because it did not 
know or have reason to know of them.  Cubby, Inc. v CompuServe Inc., 776 
F. Supp. 135 (S.D. N.Y 1991).  See also the following decisions in which 
database providers were held liable: Playboy Enterprises Inc. v. Frena, 
839 F. Supp 1552 (M.D. Fla. 1993) (summary judgment of copyright 
infringement granted against a bulletin board service that allowed its 
subscribers to upload and download the plaintiff's copyrighted 
photographs; lack of knowledge not a factor); Dun & Bradstreet v. 
Greenmoss Builders, 472 U.S. 749 (1985).  These cases seem to indicate 
that the MIDI/Music Forum should also have been sued but, of course, 
targeting CompuServe which has the deep pocket will create the broadest 
precedent.  The implications of this line of cases are potentially far- 
reaching.  Unless Congress intervenes, these cases may establish the 
scope of the duty of the administrator of the super highway for policing 
data that flows through the network.

Another recent case discussed the test for substantial similarity when a 
digital sample of a copyrighted composition is used.  In Janus v. A&M 
Records, 827 F. Supp. 282 (D. N.J. 1993) the court held there can be 
infringement if the portion copied is of great qualitative importance 
i.e., value, to the whole work even if the two works are not similar in 
their entirety.  Thus, if a new music work is based on small digital 
samples of others' compositions there could be infringement if any 
sample used is of key value to the pre-existing composition.


II. IMPORTANCE OF PATENT ISSUES

While copyright issues are the focus, patents are also important 
intellectual property in multimedia products even when the primary 
element is copyrighted content.  This is particularly true for 
multimedia products delivered on CD-ROM where the presentation process 
is an element of the product along with the content.  The Compton patent 
controversy illustrates this point.  The Compton patent claims cover the 
basic technique for searching and retrieving information of all types of 
media from a CD-ROM and other storage devices.  The U.S. Patent and 
Trademark Office reexamined this patent and invalidated the claims in 
March, 1994; however, this decision may still be appealed.  Thus, even 
if clearances are obtained for copyrighted content, the process of 
presenting that content as part of a multimedia product could infringe a 
patent.


III. RELATED ACTIVITIES IN JAPAN

Japan is trying to create a communication infrastructure to parallel the 
U.S. super highway.  In addition, several groups in Japan are studying 
various aspects of multimedia, including copyright clearance issues.  
The initial reports of committees of the Institute for Intellectual 
Property and Agency for Cultural Affairs are summarized below.  No 
action has been taken to implement the recommendations of the reports.

In early 1994, the Ministry of International Trade and Industry ("MITI") 
and the Ministry of Posts and Telecommunications ("MPT") announced an 
objective to develop key technologies for a nation-wide information 
super highway.  The intent is to connect homes and businesses in Japan 
with a rapid, interactive communications network (fiber optic cable) by 
the year 2010, which is ahead of the U.S. super highway target date.  
MPT acknowledged the U.S. lead in communications technology.  MPT 
believes such a gap would place the Japanese economy "in a precarious 
position" in the 21st century.


A. Institute of Intellectual Property Report

The Multimedia Committee of the Institute of Intellectual Property (the 
"Committee") was commissioned by MITI to study multimedia intellectual 
property issues in Japan.  In February 1994, the Committee distributed 
its initial report for worldwide comment.  The Committee proposed the 
establishment of a collective administration center (the "Digital 
Information Center") in which information on copyrighted works could be 
readily accessible and clearance approval efficiently obtained.  The 
Committee believes the Center would encourage the creation of new 
multimedia works by using pre-existing material.  Copyright holders 
would register their work on a voluntary basis.  The Center would store 
licensing information for works such as music, information and graphics.  
A description of the work, owner contact information, royalty fees and 
licensing conditions would be available.  The report acknowledged the 
considerable expense of establishing and maintaining such a database.  
Developers would select and use works by paying royalties to the Center, 
which in turn would pay the copyright owners or their agents.  The owner 
would set the amount and method of payment, such as a running royalty, a 
lumpsum royalty, or a combination of the two approaches.  The owner 
would also impose licensing conditions, such as restricting a license to 
reproduction or internal use only.

The Committee believes that incentives other than royalties are needed 
in order to motivate voluntary participation.  The Committee suggested 
that the Center be enabled to issue warnings of copyright infringement 
on behalf of registrants and to take other steps to prevent unauthorized 
exploitation of registered works.  Dealing with the moral rights of an 
author requires more study, according to the Committee, in order to 
assure compliance with the Berne Copyright Convention.  Clarification 
would be needed that an author may consent not to exercise the author's 
moral rights.  Part of the database entry for a registered work could be 
that an author has consented not to exercise such rights or requires 
users to deal with the author on an individual basis with respect to 
proposed modifications to the author's work.


B. Agency for Cultural Affairs Report

In November 1993, the Subcommittee on Multimedia of the Copyright 
Council (the "Subcommittee") of the Ministry of Education's Agency for 
Cultural Affairs proposed an organization (the "Copyright Rights-
Information Centralization Organization") for the clearance of rights in 
pre-existing works to be used as content for multimedia products.  the 
Subcommittee believes such an Organization would be useful to both the 
creators of multimedia products and the owners of pre-existing works and 
would also contribute to the general public's enjoyment of cultural 
products.

According to the Subcommittee, formation of the Organization would 
result in the simplification of licensing procedures and is a 
precondition to the collective administration of rights.  The 
Organization would centralize information on ownership administered by 
the respective organizations currently representing rights owners of 
various kinds of works and offer such information through a single 
channel.  The Subcommittee proposed the following action steps:

-- The existing organizations representing rights owners should 
consolidate the contents of information on rights ownership and create 
information databases;

-- Common standards should be established for information elements, 
taking into account the needs of users and owners;

-- The Agency for Cultural Affairs should study how to promote the 
establishment of the Organization since it would lay the foundation for 
the creation and development of a multimedia society and would 
contribute to the enjoyment of cultural products by the general public.

The Subcommittee believed it would be difficult, at least at the outset, 
to create a single organization to administer rights for all kinds of 
preexisting works because of the different nature of the works and their 
ways of use.  Therefore, the Subcommittee proposed that cooperation 
should be sought from the existing administration organizations to 
support the formation of the Organization.  With respect to moral 
rights, at a minimum the identity of authors would be provided in the 
database so authors could be dealt with on an individual basis.  A 
registered consent subject to compliance with licensing conditions was 
also discussed as a possibility.

The Subcommittee indicated that further study was needed to determine 
what entity and rules would govern the entire system of collective 
administration of such rights, including whether a general system is 
possible under which certain rights to royalty payments would be 
exercised exclusively through the Organization.


IV. THE U.S. MULTIMEDIA CLEARINGHOUSE: A PROPOSAL

A. Overview

-- The clearinghouse would cover copyright interests only at the outset, 
probably with emphasis on only a subset of types of works, for example, 
works other than musical compositions and motion pictures.

-- Copyright owners would participate on a voluntary basis.

-- The initial phase would probably be only to establish a database of 
information without royalty payment administration.  The eventual 
administration of royalty payments is possible.

-- "Routine" or standard license rights could be defined which reflect 
creative needs with associated royalty payments.  The purpose of 
defining routine rights is to avoid ambiguity which could lead to 
litigation.  Rights other than "routine" rights would be addressed on a 
case-by-case basis with the rights owner identified in the data base.  
Royalties would be set by the owner.

-- Registrants would offer nonexclusive licenses, priced differently 
based on the scope of rights, the geographical territory, the term of 
the license and other factors.  To protect licensees, the copyright 
owner would warrant that he has the right to grant such licenses.

The overall strategy would be to start small and to build incrementally 
after launching the multimedia clearinghouse.  The clearinghouse should 
initially deal only with copyrights and not patents.  Dealing with 
copyright interests will be a difficult challenge by itself.  In 
addition, other groups are working on patent clearinghouses.  An example 
is the small coalition of seven companies which expect to form a "patent 
pool" for users of the MPEG-2 (Motion Picture Experts Group) video 
standard.  This collaboration is the outgrowth of muddled intellectual 
property rights issues surrounding this standard.  Implementation relies 
greatly on both voluntary participation and a collaborative spirit on 
the part of the patent holders.

Types of copyrighted works could be incrementally added to the 
clearinghouse, because of the wide variety of types of works, the 
different ways they are used and the difficulty of gaining support and 
cooperation of existing administrative organizations.  In fact, some 
existing administrative organizations for certain types of works, such 
as musical compositions, may be adequate.

The clearinghouse could first function solely as a database search 
system.  The basic elements of the database would include: (1) name of 
the work; (2) licensing conditions; (3) royalty fees; and (4) contact 
information on the copyright owner or agent.  Nominal service fees would 
be paid by both copyright owners and licensees to use the clearinghouse.

Voluntary participation and pricing for certain defined routine uses 
could be early features of the clearinghouse.  For example, there would 
be different pricing for internal use within a business as opposed to a 
public performance.  "Routine" uses would add precision to the scope and 
nature of rights granted in order to avoid litigation since ambiguity 
has been a major source of lawsuits.  "Routine" or standard uses would 
be defined by the type of work, but might be categorized based on some 
of the following factors:

-- Whether the work will be used internally only or distributed publicly 
on a CD-ROM, through a network or otherwise.  License manager software 
could help measure use on all types of networks in both private and 
public networks.

-- The number of times a copyrighted work is used in a multimedia 
product, e.g., one time versus multiple times.

-- Whether the entire work is used or only a portion of the work and if 
only a portion, the size of the extract or sample, i.e., seconds or 
minutes, words or pages, etc.

-- Whether the work is used in its original form or is modified or 
otherwise transformed by the multimedia product The administration of 
royalty payments could be added at some point.  Service fees would also 
be charged for collecting royalties and for clearance services.  Actual 
delivery of a work could be made through the super highway as the 
clearinghouse evolves.

The clearinghouse should be pro-competitive rather than anti-competitive 
since it could be used by any rights holder or developer.  The 
clearinghouse could request a business review letter from the antitrust 
division of the U.S.  Department of Justice for added protection.


B. Coalition Support Needed

The success of the clearinghouse depends on substantial participation by 
both product developers and copyright owners.  Both must perceive the 
clearinghouse as reliable and easy-to-use.  Each group has its own 
economic incentives.  Copyright owners can project generating greater 
royalties.  Content users will favor the establishment of such a 
clearinghouse as a means to help create new products without having to 
create totally new content.  The more extensive the choice of 
copyrighted works, the greater the use of the clearinghouse.

The economic incentives for participation would not likely be adequate 
at the outset to cause content owners to participate.  A coalition of 
influential businesses, private industry and public trade groups would 
be needed to persuade copyright owners to participate in the 
clearinghouse.  Over time, the clearinghouse would provide a greater 
opportunity for copyright owners to increase royalty revenues.  The 
availability of a clearinghouse could also discourage unauthorized use 
of copyrighted content by making it easier to obey the copyright law.

Copyright licensing organizations are gaining momentum as a means to 
ensure that intellectual property owners do not lose royalties from the 
unauthorized electronic use of their works.  The primary targets of the 
monitoring and enforcement actions are distributors and resellers.  The 
clearinghouse could assist in such enforcement efforts.

Many groups could provide important support for the establishment and 
use of the clearinghouse, including the following: American Society of 
Journalists and Authors, American Society of Media Photographers, 
Artists Rights Foundation, The Authors Guild, Center for Creative 
Imaging, the Digital Audio-Visual Council, Interactive Multimedia 
Association, National Press Photographers Association, National Writers 
Union, and the San Francisco's Multimedia Development Group.


C. Management and Administration

The administrator of the multimedia clearinghouse could be the CCC, an 
existing private rights clearance agency or a completely new entity.  
Using an existing entity with clearance experience makes the most sense.  
The existing clearing agencies would be important at least through the 
startup phase and possibly indefinitely if a royalty administration 
function is not implemented or if the type of work is not generally 
included in the clearinghouse.

Some initial funding could come from the federal government's support of 
the super highway initiative.  On-going funding could come from service 
fees associated with both owners and licensees use of the clearinghouse.


V. CONCLUSION

Given the evolution of multimedia standards coalitions, drawing 
television closer to the computer and communications worlds via the 
identification of major interfaces and protocols needed for interactive 
applications and services, it is timely to complement this activity with 
a fair means of encouraging new creativity while fairly providing 
compensation for prior creativity - the multimedia copyright 
clearinghouse.

Multimedia content will be in the fast lane on the super highway.  The 
U.S.  appears to have an initial worldwide, competitive advantage in 
multimedia productions and titles because of its lead in market-driven 
creativity in software, particularly in mass-market application software 
that fills a market need.  The availability or non-availability of a 
copyright clearinghouse could increase the U.S.  competitive advantage 
or provide the opportunity for others to catch up.


June 18, 1994


1. Law firm of Fenwick & West, Two Palo Alto Square, Suite 800,
   Palo Alto, CA 94306;
   Tel. No. (415) 494-0600; Fax No. (415) 424-0859;
   Internet: fmg@fwpa.com/mre@fwpa.com

2. Sandy Jane Wong, M.P.A., Two Ohlone, Portola Valley, CA 94028;
   Tel. No. (415) 851-7233;
   Internet:  sandy@starwave.batnet.com

