THE MULTIMEDIA LAW HANDBOOK

A PRACTICAL GUIDE FOR DEVELOPERS AND PUBLISHERS

by J. Dianne Brinson and Mark F. Radcliffe








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TABLE OF CONTENTS

	Introduction

Part 1:  Building Blocks

1	The Legal System in the U.S.
2	Copyright Law  
3	Patent, Trademark, and Trade Secret Law
4	Ownership of Copyrights and Other Intellectual Property
5	Contract Law Basics

Part 2:  Production Relationships
6	Development Agreements
7	Employees
8	Independent Contractors and Consultants

Part 3:  Other Production Issues
9	Using Preexisting Works:  Determining Whether You Need Permission
10	Clearing Rights and Obtaining Licenses
11	Licensing in the Entertainment and Publishing Industries
12	Using Music in Your Multimedia Product


13	Avoiding Violations of the Laws of Publicity, Privacy, and Libel 
14	Dealing with Unions

Part 4:  PostProduction Issues
15	Choosing a Name for Your Product
16	Protecting Your Intellectual Property Rights
17	Laws Governing the Sale of Multimedia Works  
18	Negotiating Distribution Agreements	
19	Publisher Concerns
APPENDICES
	Appendix A		Selected Statutes
	Appendix B		Form Contracts
	Appendix C		Clearing Agents
	Appendix D		Stockhouses and Other Content Sources 
	Appendix E		Multimedia Organizations
	Appendix F		Multimedia Publications

ACKNOWLEDGMENTS


	We would like to extend our profound thanks to all of the 
individuals who generously provided their assistance in writing this 
book. In many ways, this book was a collaborative project. It depended 
on the willingness of many people to provide us with information and 
keep us informed of the almost daily changes in this area.  We wish to 
thank particularly Craig Sheumaker for urging us to undertake the 
project and the partners of Ware & Freidenrich (now Gray Cary Ware & 
Freidenrich) who generously provided the form contracts in Appendix B. 
We also wish to thank Mary Clyde, who spent her weekends organizing the 
appendices. 

	This book includes our opinions. They should not be interpreted as 
those of Ware & Freidenrich or its clients. We have done our best to 
accurately reflect the practices in this rapidly evolving industry, but 
any errors are solely our responsibility. 

	We would like to thank the following individuals for their 
assistance:

Warren Adler 			Directors Guild of America
	Ed Bernstein 			The Software Toolworks, Inc.
	Joel Block			Writers Guild of America
	Brian Blum 			The Software Toolworks, Inc.
	John Campbell	 	Media Vision Technology, Inc.
	Vincent Castellucci		The Harry Fox Agency, Inc.
	Dominique Claessens		Image Smith, Inc.
	Gary Culpepper		Law Offices of Gary Culpepper
	Richard Curtis		Richard Curtis Associates
	Bob Derber			Maxis	
	John Evershed		Mondo Media
	Darlene deMontfreid		Media Vision Technology, Inc.
	Halle Eavelyn			Hyperbole
	Dick Gabriel			American Federation of Musicians
	Ted Grabowski		The Software Toolworks, Inc.
	Craig Harding			Kaleida Labs, Inc.
	Bob Kohn			Borland International, Inc.
	Jake Myrick			Image Smith, Inc.
	Jim Myrick			Image Smith, Inc.
	Deirdre O'Malley		Mondo Media
	Jeannine Parker		IICS
	Randy Parker			Clearing House, Ltd.
	Michael Prohaska		Screen Actors Guild
	Greg Roach			Hyperbole
	Jim Roberts			Image Smith, Inc.	
	Lionel Sobel			Loyola Law School
	Allen Thygessen		Media Vision Technology, Inc.
	Karen Stuart			AFTRA
	Chuck Warn			Warn Communications Group





BIOGRAPHIES

	J. Dianne Brinson has 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 can 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 American Association of Publishers, 
American Magazine Conference, National Association of Broadcasters 
annual convention, Game Developer's 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 , Daily Variety and San 
Francisco Chronicle on legal issues in multimedia.
He can be reached at mradcliffe@gcwf.com.


CHAPTER 1
THE U.S. LEGAL SYSTEM

	In the United States, laws are made at the federal and state 
levels.  Laws adopted by legislative bodies  Congress and state 
legislatures  are called "statutes."  
	The federal and state courts enforce statutes.  They also create 
law. 
	This chapter describes some of the basic concepts of our legal 
system, and the roles played by legislatures and courts.  

FEDERAL STATUTES
	The U.S. Constitution gives Congress to power to enact federal 
laws ("statutes") on certain subjects.  
	The Copyright Act (discussed extensively in Chapter 2) is one 
example of a statute adopted by Congress.  Congress's power to enact the 
Copyright Act stems from Article I, Section 8, of the Constitution, 
which authorizes Congress to establish laws giving "authors and 
inventors the exclusive right to their respective writings and 
discoveries" to encourage progress in the arts and sciences.  
	According to the Constitution, all powers not expressly delegated 
to Congress are reserved to the states.  The "commerce clause" of the 
Constitution (which concerns interstate commerce) is generally viewed as 
giving Congress broad power to regulate matters affecting interstate 
commerce  trademarks used in interstate commerce, for example.
	Federal lawmaking begins when a member of the Senate or the House 
of Representatives introduces a bill.  Most bills are referred to 
standing committees (for example, the House Committee on the Judiciary) 
and to subcommittees for study.  Bills are later brought before the 
Senate or House for debate and vote.  Differences between the Senate and 
House versions of a bill are resolved in joint conference committees.  
	After the House and Senate have approved a uniform version of the 
bill, the bill is sent to the President.  If the President signs the 
bill, it becomes law.  If the President vetoes the bill, it becomes law 
only if the Senate and House override the veto.  This requires the 
consent of twothirds of the members of the Senate and House.

STATE STATUTES
	State legislatures can pass laws on matters for which they share 
jurisdiction with Congress.  Trademark law is an example of a shared 
jurisdiction.  In other matters, the federal government has taken 
exclusive jurisdiction.  Copyright is an example:  The Copyright Act 
prohibits the states from granting copyrightlike protection.  
	States can also pass laws on matters in which the Constitution 
does not grant jurisdiction to the federal government.
	State lawmaking occurs through a process that is similar to the 
federal process.  

THE COURTS
	The courts enforce statutes and interpret them.  They also 
invalidate unconstitutional statutes, and make law in areas not covered 
by statutes.  Here are some examples of the four main roles played by 
our courts:

	  Enforcement The Copyright Act gives a copyright owner the 
exclusive right to reproduce the owner's work.  A copyright infringement 
suit is an example of court enforcement of a statute.  (Copyright 
infringement is discussed in "Infringement," Chapter 2.)

	  Interpretation.  According to the Copyright Act, the copyright 
in a work created by an employee within the scope of his or her 
employment is owned by the employer.  The Copyright Act does not define 
the term "employee."  The Supreme Court case that defines the term is an 
example of court interpretation of a statute.  (That case is discussed 
in the "The Work Made for Hire Rule," Chapter 4.)

	  Invalidation.  The courts invalidate unconstitutional laws.  
Unconstitutional laws are laws that conflict with provisions of the 
Constitution.  The Constitution is the supreme law of the United States.  
Many "constitutionality" cases involve claims that a law violates the 
Constitution's Bill of Rights (the first ten amendments).  In Roe v. 
Wade, the Supreme Court invalidated a state statute restricting women's 
access to abortion.  According to the Court, the statute violated a 
pregnant woman's constitutional right of privacy. 

	  Making Law.  The courts create the law for "common law" subject 
areas.  Common law covers areas not covered by statutes.  In many 
states, for example, individuals' rights of privacy and publicity 
(discussed in "The Rights of Publicity and Privacy," Chapter 13) are 
protected under common law rather than under statutory laws.

	Types of Courts
	There are several types of courts.  The federal and state court 
systems consist of two levels of courts:  Trial courts and appellate 
courts.  Cases are tried in trial courts.  Appellate courts review the 
decisions of the trial courts.  (Appellate and trial courts are 
discussed in "Civil Lawsuits," later in this chapter.)   
	The federal court system is divided into 13 judicial circuits.  
Eleven of the circuits are numbered.  Each of the numbered circuits 
contains more than one state.  The Ninth Circuit, for example, covers 
California, Oregon, Washington, Idaho, Nevada, Arizona, Alaska, and 
Hawaii.  The 12th and 13th circuits are the District of Columbia Circuit 
and the Federal Circuit.  The Federal Circuit handles appeals in patent 
cases and Claims Court cases.
	Each federal circuit has one appellate court.  These courts are 
known as Courts of Appeals or Circuit Courts.  The Supreme Court reviews 
the decisions of the Courts of Appeals.  
	Each federal circuit is divided into judicial districts.  A 
district can be as small as one city or as large as an entire state.  
The trial courts are known as the United States District Courts.  

	Jurisdiction

	The federal courts have jurisdiction over cases involving federal 
statutes (the Copyright Act, for example) and other "federal questions."  
They also have jurisdiction over cases in which the party filing the 
suit and the party being sued reside in different states.  This type of 
federal jurisdiction is known as "diversity" jurisdiction.  
	Other types of cases must be brought in state court.

	Civil and Criminal Cases
	A criminal case is brought by the federal government or a state to 
prosecute a defendant (the party sued) for violations of the 
government's criminal laws.  Murder and burglary are examples of 
violations of criminal laws.  If the defendant in a criminal case is 
found guilty by the jury, he or she is sentenced by the court to serve a 
jail sentence or pay a fine as punishment for the crime.  
	A civil case is a case brought by one party (the "plaintiff") 
against another party (the "defendant") to resolve a legal dispute 
involving rights based on statutory law or common law.  A copyright 
infringement case is an example of a civil case involving statutory law.  
A suit seeking damages for a writer's  breach of a contract (in which 
the writer promised to create a script for a movie but failed to do so) 
is an example of a civil case involving common law rights.  (Breach of 
contract is discussed in "What Is a Contract?," Chapter 5.)
	While certain violations of the Copyright Act and the Lanham Act 
(the federal trademark statute) are criminal violations, multimedia 
developers and publishers will be concerned primarily with civil cases. 

	Civil Lawsuits
	There are several stages in civil lawsuits, from initiation to 
trial and then on to stages of appeal.  We'll discuss these stages in 
this section.

	Initiation
	A civil lawsuit is initiated when the plaintiff files a 
"complaint" against the defendant alleging that the defendant has 
wronged the plaintiff in some way recognized by the law.  In most civil 
lawsuits, the plaintiff asks the court to award the plaintiff "damages" 
(a remedy for the defendant's wrongdoing  usually money) or to order 
the defendant to do something.  
	The defendant responds to the allegations in the complaint by 
filing an "answer" (a document in which the defendant admits or denies 
the complaint's allegations and states defenses).  The defendant can 
also file a "counterclaim" against the plaintiff (allegations that the 
plaintiff has wronged the defendant).  

	Trial
	If the parties do not "settle" the case (reach their own agreement 
on how to resolve the dispute), the case eventually goes to trial.  In 
most types of civil cases, the Constitution gives the parties a right to 
a jury trial.  The role of the jury is to decide questions of fact.  
However, in some complex cases, the parties choose to dispense with the 
jury and have the case decided by the judge. 

	Appeal
	If the losing party in a civil lawsuit is not satisfied with the 
decision of the trial court, the losing party can appeal the case to the 
appropriate appellate court.  
	In the federal court system, the appeal generally must be filed 
with the Court of Appeals for the judicial circuit in which the trial 
was held.  A case tried in the United States District Court for the 
Northern District of California, for example, must be appealed to the 
Court of Appeals for the Ninth Circuit.  
	An appellate court's job in reviewing a trial court's decision is 
to look for "mistakes of law" made by the trial court.  Appellate courts 
do not "second guess" factual issues decided by trial courts.  In our 
legal system, factual issues are supposed to be resolved by the jury, 
not by the appellate court.  So long as there is adequate factual 
evidence to support the verdict, an appellate court will not reverse a 
trial court's decision or "remand" the case (send it back to the trial 
court for retrial) unless they find that the trial court made a "mistake 
of law."  	
	Filing an appeal is probably a waste of money unless a losing 
party can reasonably hope to convince the appellate judges that there is 
insufficient evidence to support the trial court's decision, or that the 
trial court misapplied the law.

Example:  Plaintiff's lawsuit alleges that Defendant infringed 
the copyright on Plaintiff's song by copying the melody of the 
song.  The jury found that Defendant did not infringe Plaintiff's 
copyright.  If the jury reached its decision after being told by 
the judge that  a song's melody is not protected by copyright (a 
mistake in the applicable law, copyright law), Plaintiff has a 
good basis for appeal.  However, if the jury reached its decision 
after listening to Defendant's song and concluding that the melody 
of Defendant's song is not similar to the melody of Plaintiff's 
song, Plaintiff does not have a strong basis for appeal.  (Whether 
or not the songs have similar melodies is a factual 
determination.)    

	Appellate courts generally issue written opinions explaining how 
they reached their conclusions on whether to affirm (uphold), reverse, 
or remand a case.  These opinions are important parts of the development 
of the law because our legal system is based on "precedent" (reliance on 
previously decided cases).  (The role of precedent is discussed in 
"Precedent," later in this chapter.)
	
	Supreme Court Review
	There are two ways to get a case reviewed by the U.S. Supreme 
Court:  by appeal and by certiorari.  The losers in certain types of 
cases  for example, cases involving claims that state statutes are 
unconstitutional  have a right to appeal to the Supreme Court.  
	For most cases, though, there is no right of appeal to the Supreme 
Court.  However, a party who has lost a case at the federal Court of 
Appeals level can file a petition for certiorari with the Supreme Court.  
A petition for certiorari is a document explaining why the Supreme Court 
should review a case.  If the Supreme Court grants certiorari, the 
appeal proceeds.  If the Court denies it,  the Court of Appeals' 
decision stands.  
	Thousands of petitions for certiorari are filed each year and most 
are denied.  The Supreme Court is likely to grant certiorari on a case 
only if the case involves a matter of national interest or the Court 
believes that it must decide the case to resolve conflicts among the 
Circuit Courts and create uniformity in federal law. 

	Precedent
	An appellate court's decision on an issue is binding on lower 
courts in the appellate court's jurisdiction.  Thus, an appellate 
court's decisions are "precedent" that the lower courts in the appellate 
court's jurisdiction must follow (apply).  

Example:  In Effects Associates, Inc. v. Cohen, the United 
States Court of Appeals for the Ninth Circuit held that the grant 
of a nonexclusive copyright license can be implied from the 
copyright owner's conduct.  (Implied licenses are discussed in 
"Implied Licenses," Chapter 8.)  This decision is binding on the 
federal district courts located in the Ninth Circuit.  Those 
courts are not free to decide that a nonexclusive copyright 
license cannot be implied from conduct.

	A lower court's decision is not binding on a higher court.  In 
fact, appellate courts frequently reverse decisions made by trial courts 
to correct the trial courts' "mistakes of law."
	Because the United States Supreme Court is the "highest court in 
the land," the Supreme Court's decisions are binding on all courts in 
the United States.

Example:  In Community for Creative Nonviolence v. Reid, the 
Supreme Court decided how to apply the Copyright Act's "work made 
for hire" rule to works created by independent contractors.  That 
decision is binding on all courts in the United States.  (Work 
made for hire is discussed in "The Work Made for Hire Rule," 
Chapter 4.)

	A court's decision may "be persuasive" outside its region.  For a 
decision to "be persuasive" means that other courts, while not compelled 
to follow it, choose to follow it.  For example, if the Court of Appeals 
for the Eleventh Circuit has never decided whether a nonexclusive 
copyright license can be implied from the copyright owner's conduct but 
the Ninth Circuit has, the Eleventh Circuit may reach the same 
conclusion as the Ninth Circuit when it decides that issue because it 
believes that the Ninth Circuit's decision was correct. 
	Earlier court decisions are generally "followed" by the deciding 
court in all later cases involving the same issue.
For example, if the Ninth Circuit decides a case that involves the same 
legal issues that were involved in a previous case, it is likely to 
decide those issues as it did in the previous case.
	The reliance that our courts put on previously decided cases in 
deciding new cases is known as stare decisis.  That is Latin for "let 
the decision stand."  The doctrine of stare decisis does not prevent a 
court from "overruling" its own previously decided cases.  However, 
stare decisis discourages rapid and radical changes in the law.  As 
Supreme Court Justice William O. Douglas once wrote in the Columbia Law 
Review, "stare decisis provides some moorings so that men may trade and 
arrange their affairs with confidence....It is the strong tie which the 
future has to the past."  
	The doctrine of stare decisis is the reason that an attorney 
performs legal research hoping to find cases supporting the attorney's 
position on a legal issue.  
 
FINDING THE LAW
	Because law is made by the courts on a precedent basis following 
the doctrine of stare decisis, and also made by Congress and the state 
legislatures, knowing the law on a given topic generally requires a 
review of both statutory law and case law. 

	Statutes
 	Federal and state statutory laws can be found by consulting 
published "codifications" of laws in law libraries maintained by law 
schools, law firms, courts, and bar associations.  To find a federal law 
such as the Copyright Act, for example, you would look in the United 
States Code, which is divided into "titles."  Federal and state 
statutory laws can also be obtained "online" from Westlaw or Lexis, two 
computerized legal research services.
	Recently adopted laws may not be included in the published 
codifications of statutes.  While the publishers of these codifications 
add new material regularly (in "pocket parts" inserted at the back of 
appropriate volumes), even the pocket parts may not include laws adopted 
in the most recent session of the legislature.  

	Court Decisions
	Court decisions (also known as "case law") can be found in 
publications called "reporters."  For example, decisions of the United 
States Supreme Court are published in the United States Reports, the 
Supreme Court Reporter, and the Lawyers Edition (three different 
"reporters" from three different publishers).  
	These decisions are also available from computerized services such 
as Westlaw and Lexis, which provide online research assistance for 
locating cases on desired topics.  "Digests" that divide decide cases 
into topics are also helpful for locating relevant cases.  Other 
research resources help lawyers determine whether cases in which they 
are interested have been reversed by a higher court or overruled 
(modified by a later decision of the same court).
	Various publishing companies publish "annotated" statutory codes, 
which bring statutes and relevant court decisions together in one 
source.  West Publishing Company, for example, publishes the United 
States Code Annotated, which lists the court decisions enforcing or 
interpreting each provision of the United States Code.  

ARBITRATION
	The parties to a dispute sometimes choose to resolve a dispute 
through arbitration rather than through court litigation.  In 
arbitration, a dispute is resolved by a neutral arbitrator rather than 
by a judge or jury.  
	Arbitration is generally quicker and cheaper than court 
litigation.  Specially qualified arbitrators are often used to resolve 
technical disputes.
	Both parties must agree to submit their dispute to arbitration.  
Many contracts require that disputes be resolved through arbitration 
rather than through litigation.
	In the United States, many arbitration cases are handled by 
arbitrators approved by the American Arbitration Association, which has 
offices in a number of cities.  Arbitration is similar to a trial in 
that both parties present their cases to the arbitrator, who renders a 
decision.  Appeals of arbitrators' decisions are generally possible only 
if the arbitration was conducted improperly.

GOVERNMENT OFFICES AND AGENCIES
	Government offices and agencies play an important role in our 
legal system.  The Copyright Office and the U.S. Patent and Trademark 
Office are the key federal government offices for multimedia developers 
and publishers.  (The Copyright Office is discussed in "Copyright 
Protection," Chapter 16.  The U.S. Patent and Trademark Office is 
discussed in "Patent Law" and "Trademark Law," Chapter 3.)

CHAPTER 2
COPYRIGHT LAW

	There are four major intellectual property laws in the United 
States that are important for multimedia developers and publishers:

	  Copyright law.
	  Patent law.
	  Trademark law.
	  Trade secret law.

	In this chapter, we discuss copyright law, the most important of 
the intellectual property laws for developers and publishers of 
multimedia works.  Patent law, trademark law, and trade secret law are 
discussed in Chapter 3.  
	Ownership of copyrights and other intellectual property is 
discussed in Chapter 4.  In Chapter 16, we discuss ways in which you can 
use the four intellectual property laws to protect your multimedia 
works.
	Other laws that create rights somewhat like intellectual property 
law rights  privacy, publicity, and dilution laws  are discussed in 
Chapters 13 and 15.  



INTRODUCTION

	Copyright law in the U.S. is based on the Copyright Act of 1976, a 
federal statute that went into effect on January 1, 1978.  We'll refer 
to this statute throughout the book as the Copyright Act.  Excerpts from 
the Copyright Act appear in Appendix  A.  
	States cannot enact their own laws to protect the same rights as 
the rights provided by the Copyright Act.  For example, a state cannot 
pass a law to extend copyright protection on works in the state beyond 
the term of protection given by the Copyright Act.  State "copyright" 
laws exist, but they are limited to works that cannot be protected under 
federal copyright law.  (Requirements for federal protection are 
discussed in "Standards," later in this chapter.)  
	Copyright law is important for multimedia developers and 
publishers for two reasons:  

	  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.  (Steps to maximize your protection are discussed in "Copyright 
Protection," Chapter 16.)

	  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, as explained in Chapter 9.  


TYPES OF WORKS PROTECTED BY COPYRIGHT	
	Copyright law protects "works of authorship."  The Copyright Act 
states that works of authorship include the following types of works:
	
	  Literary works.  Novels, nonfiction prose, poetry, newspaper 
articles and newspapers, magazine articles and magazines, computer 
software, software documentation and 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. 
	  Architectural works.  Building designs, whether in the form of 
architectural plans, drawings, or the constructed building itself.

STANDARDS
	To receive copyright protection, a work must be "original" and 
must be "fixed" in a tangible medium of expression.  Certain types of 
works are not copyrightable.

Originality
The originality requirement is not stringent:  A work is original in the 
copyright sense if it owes its origin to the author and was not copied 
from some preexisting work.  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.   

	Facts owe their origin to no one and so are not original.  A 
compilation of facts (a work formed by collecting and assembling data) 
is protected by copyright only to the extent of the author's originality 
in the selection, coordination, and arrangement of the facts. 

Example:  Ralph created a neighborhood phone directory for his 
neighborhood by going doortodoor and getting his neighbors' 
names and phone numbers.  The directory's facts (names and phone 
numbers) are not original.  Ralph's selection of facts was not 
original (he "selected" every household in the neighborhood).  His 
coordination and arrangement of facts (alphabetical order by last 
name) is routine rather than original.  The directory is not 
protected by copyright.	

Fixation
	According to Section 101 of the Copyright Act, 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."  It makes no difference what the form, 
manner, or medium is.  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 live 
television broadcast is "fixed" if it is recorded simultaneously with 
the transmission. 

Uncopyrightable Works
	Works prepared by federal government officers and employees as 
part of their official duties are not protected by copyright.  
Consequently, federal statutes (the Copyright Act, for example) and 
regulations are not protected by copyright.  This rule does not apply to 
works created by state government officers and employees.
	The design of a useful article is protected by copyright only if, 
and to the extent that, the design "incorporates pictorial, graphic, or 
sculptural features that can be identified separately from, and are 
capable of existing independently of, the utilitarian aspects of the 
article."  For example, while a "normal" belt buckle is not protected, a 
threedimensional beltbuckle design with a dolphin shape qualifies for 
limited protection.
	Uncopyrightable works and works for which copyright protection has 
ended are referred to as "public domain" works.  (These works are 
discussed in "Public Domain Works," Chapter 9.)

PROCEDURE FOR GETTING 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).  
	The use of copyright notice is optional for works distributed 
after March 1, 1989.  Copyright notice can take any of these three 
forms:

	   followed by a date and name. 
	  "Copyright"  followed by a date and name.
	  "Copr." followed by a date and name.

	The benefits of registering a copyright and using copyright notice 
are discussed in "Copyright Protection," Chapter 16.  The role of notice 
for works distributed prior to March 1, 1989, is discussed in "Public 
Domain Works," Chapter 9.

THE EXCLUSIVE RIGHTS
	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."  

	  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."  

	The exclusive rights are discussed in more detail in "Myths," 
Chapter 9, and in the "Determining What Rights You Need," Chapter 10.

INFRINGEMENT
	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 as part of the multimedia work).

	A copyright owner can recover actual or, in some cases, statutory 
damages from an infringer (see "Copyright Protection," Chapter 16).  The 
federal district courts have the power to issue injunctions (orders) to 
prevent or restrain copyright infringement and to order the impoundment 
and destruction of infringing copies.   

DURATION OF THE RIGHTS
	For works created on and after January 1, 1978, the copyright term 
for works created by individuals is the life of the author plus 50 
years.  
	The copyright term for "works made for hire" 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.  
Works made for hire are works created by employees for employers and 
certain types of specially commissioned works (see "The Work Made for 
Hire Rule," Chapter 4).  
	The duration of copyright for pre1978 works is discussed in 
"Public Domain Works," Chapter 9.

LIMITATIONS ON THE EXCLUSIVE RIGHTS
	The copyright owner's exclusive rights are subject to a number of 
exceptions and limitations that give others the right to make limited 
use of a copyrighted work.  Major exceptions and limitations are 
outlined in this section.  (They are discussed in detail in "When You 
Don't Need a License," Chapter 9.)

	Ideas
	Copyright protects only against the unauthorized taking of a 
protected work's "expression."  It does not extend to the work's ideas, 
procedures, processes, systems, methods of operation, concepts, 
principles, or discoveries.  

	Facts
	A work's facts are not protected by copyright, even if the author 
spent large amounts of time, effort, and money discovering those facts.  
Copyright protects originality, not effort or "sweat of the brow."

	Independent Creation
  	A copyright owner has no recourse against another person who, 
working independently, creates an exact duplicate of the copyrighted 
work.  The independent creation of a similar work or even an exact 
duplicate does not violate any of the copyright owner's exclusive 
rights.

	Fair Use
	The "fair use" of a copyrighted work, including use for purposes 
such as criticism, comment, news reporting, teaching, scholarship, or 
research, is not an infringement of copyright.  Copyright owners are, by 
law, deemed to consent to fair use of their works by others.
	The Copyright Act does not define fair use.  Instead, whether a 
use is fair use is determined by balancing these factors:

	  The purpose and character of the use.

	  The nature of the copyrighted work.

	  The amount and substantiality of the portion used in relation 
to the copyrighted work as a whole.

	  The effect of the use on the potential market for, or value of, 
the copyrighted work.	


INTERNATIONAL PROTECTION
	U.S. authors automatically receive copyright protection in all 
countries that are parties to the Berne Convention for the Protection of 
Literary and Artistic Works, or parties to the Universal Copyright 
Convention (UCC).  Most countries belong to at least one of these 
conventions.  Members of the two international copyright conventions 
have agreed to give nationals of member countries the same level of 
copyright protection they give their own nationals.

Example:  Publisher has discovered that bootleg copies of one of 
its multimedia works are being sold in England.  Because the 
United Kingdom is a member of the Berne Convention and the UCC, 
Publisher's work is automatically protected by copyright in 
England.  When Publisher files a copyright infringement action in 
England against the bootlegger, Publisher will be given the same 
rights that an English copyright owner would be given.	

	Works of foreign authors who are nationals of Berne or UCC member 
countries automatically receive copyright protection in the U.S., as do 
works first published in a Berne Convention or UCC country.  Unpublished 
works are subject to copyright protection in the U.S. without regard to 
the nationality or domicile of the author.  


CHAPTER 3
PATENT, TRADEMARK, AND TRADE SECRET LAW

	While copyright law is the most important intellectual property 
law for protecting rights in multimedia works, you need to know enough 
about patent, trademark, and trade secret law to avoid infringing 
intellectual property rights owned by others and to protect your 
multimedia works.  These three intellectual property laws are discussed 
in this chapter.  
	In Chapter 16, we discuss ways in which you can use these three 
laws and copyright law to protect your multimedia works.  Ownership of 
intellectual property is discussed in Chapter 4.
Choosing product names is covered in Chapter 15.

	
PATENT LAW
	Patent law in the U.S. is based on a federal statute, the Patent 
Act.  States are prohibited from granting protection similar to that 
provided by the Patent Act.

	Types of 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.   

	Standards
	There are strict requirements for the grant of utility patents and 
design patents.  We'll discuss the requirements in this section.

	Utility 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.	
	Meeting the useful requirement is easy for most inventions.  An 
invention is useful if it can be applied to some beneficial use in 
society.  
	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.  
	If you think your multimedia work involves technology that might 
be patentable, you should contact a patent attorney before you display 
or distribute your work.  In the multimedia field, an example of an 
invention that might be patentable is a software engine for multimedia 
works.  An example of a process that might be patentable is an 
instructional method for using interactive video technology in 
classrooms (Optical Data Corporation was recently granted two patents 
covering such a process).
	Unrealized mental conceptions are not patentable.  Methods of 
transacting business and printed matter without physical structure are 
not patentable.  Discoveries of scientific principles, laws of nature, 
and natural phenomena are not patentable (although applications of such 
discoveries are).  The discovery of a new use for an old product is not 
patentable.

	Design Patents
	To qualify for a design patent, a design must be new, original, 
and ornamental.  Design patents may be an option for protecting some 
elements of multimedia works (user interfaces, for example, which can 
also be protected through copyright law).  However, design patents are 
considered rather weak intellectual property protection, and owners of 
design patents rarely sue to enforce their patents against infringers.


	Procedure for Getting Protection
	Patent protection is obtained by demonstrating in an application 
filed with the U.S. Patent and Trademark Office that the invention meets 
the stringent standards for grant of a patent.  The patent application 
process is an expensive, timeconsuming process (it generally takes at 
least two years).  Although you can file a patent application yourself, 
the application process is very complex.  You should consider using an 
experienced patent attorney or patent agent (a nonlawyer who has passed 
the special patent bar exam given by the U.S. Patent and Trademark 
Office). 
	
	Exclusive Rights
	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.

	Duration
	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.

Limitations on the Exclusive Rights
	There are two major limitations on the patent owner's exclusive 
rights.  They are discussed in this section.

		Functionally Equivalent Products
	A patent owner can exclude others from making, using, or selling 
products or using processes that do substantially the same work as the 
patented invention in substantially the same manner.  However, a patent 
does not protect the patent owner from competition from functionally 
equivalent products or processes that work in different ways.  

Example:  Microco owns a patent covering a laser printer.  While 
Microco can prevent others from making, using, or selling laser 
printers that work in substantially the same manner as Microco's 
printer, it cannot prevent others from making, using, or selling 
laser printers that operate in a different manner. 

		Invalidation
	The validity of an issued patent is subject to challenge in an 
infringement proceeding.  Defendants in infringement suits usually raise 
the defense of patent invalidity, asserting that the invention covered 
by the patent was not novel or nonobvious.  It is not unusual for a 
patent infringement suit to result in a determination that the U.S. 
Patent and Trademark Office made a mistake in granting the patent.  
	
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 ease of expression, we will use "trademark" in this book to 
refer to both trademarks (used on goods) and service marks (used for 
services).  
	For trademarks used in commerce, federal trademark protection is 
available under the federal trademark statute, the Lanham Act.  (We will 
refer to this statute as the Lanham Act in this book.)  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.

	Types of Works Protected
	Examples of words used as trademarks are Kodak for cameras and 
Burger King for restaurant services.  Examples of slogans used as 
trademarks are Fly the Friendly Skies of United for airline services and 
Get a Piece of the Rock for insurance services.  Examples of characters 
used as trademarks are Pillsbury Dough Boy for baked goods and Aunt 
Jemima for breakfast foods.  	
	Sounds can be used as trademarks, such as the jingle used by 
National Public Radio.  Product shapes and configurations  for example, 
the distinctively shaped bottle used for CocaCola  can also serve as 
trademarks.

	Standards
	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. 
Geographically descriptive marks  "Idaho" for potatoes grown in Idaho  
are not protectible trademarks for products that originate in the 
geographical area (all Idaho potato growers should be able to use 
"Idaho" in connection with selling their potatoes).

	Procedure for Getting 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.
		Federal Protection
	Federal registration is limited to trademarks used in interstate 
commerce (or intended for use in interstate commerce).  Before November, 
1989, a trademark application could be filed only after the trademark's 
owner had actually used the trademark in commerce.  Under current law, a 
person who has a "bona fide" intention to use a trademark in commerce 
may apply to register the trademark.  
	For federally registered marks, the use of notice of federal 
registration is optional.  A federal registrant may give notice that his 
or her trademark is registered by displaying with the trademark the 
words "Registered in U.S. Patent and Trademark Office" or the symbol   .  

	State Protection
	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.  Those relying on state trademark law 
for protection cannot use the federal trademark registration symbol, but 
they can use the symbol "TM" (or, for a service mark, "SM").  

	Exclusive Rights
	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. 

	Tips on how to avoid trademark infringement in naming your 
multimedia products are given in Chapter 15.
	One of the most important benefits of federal registration of a 
trademark is the nationwide nature of the rights obtained.  For the 
registrant, federal registration in effect reserves the right to start 
using the mark in new areas of the U.S.  
Example:  Small Multimedia Co., a California corporation, 
obtained a federal trademark registration on the trademark Abra 
for videogames.  Small Multimedia Co. did not begin using the 
trademark on videogames in New York until two years after it 
obtained its federal registration.  In the meantime, Giant Co. had 
started using Abra on videogames in New York.  Because Small 
Multimedia Co.'s federal registration gives Small a right to use 
Abra that is superior to Giant Co.'s right to use Abra,  Small 
Multimedia Co. can stop Giant Co. from using Abra on videogames in 
New York  even though Giant started using Abra on videogames in 
New York before Small did. 

	Other advantages of federal registration are discussed in 
"Trademark Protection," Chapter 16.  
	A trademark owner's rights under state trademark law (and the 
rights of an unregistered trademark owner under federal law) are 
generally limited to the geographical area in which the owner has used 
the trademark.

Example:  (For this example, we changed just one fact from the 
previous example.)  Small Multimedia Co. did not get a federal 
trademark registration.  Now Giant's right to use Abra on 
videogames in New York is superior to Small Multimedia Co.'s right 
to use Abra on videogames in New York, because Giant was the first 
to actually use the trademark on videogames in New York.

	Duration
	A certificate of federal trademark registration remains in effect 
for 10 years, provided that an affidavit of continued use is filed in 
the sixth year.  A federal registration may be renewed for any number of 
successive 10year terms so long as the mark is still in use in 
commerce.  The duration of state registrations varies from state to 
state.  Common law rights endure so long as use of the trademark 
continues.

	Limitations of the Exclusive Rights
	Trademark law does not give protection against use of the 
trademark that is unlikely to cause confusion, mistake, or deception 
among consumers, but dilution laws may provide such  protection (see 
"Dilution," Chapter 15).  

Example:  Western Software has a federal registration for the 
use of Flash on multimedia development tool software.  If Giant 
Co. starts using Flash on desktop publishing software, Giant Co. 
may be infringing Western Software's trademarks because consumers 
may think the desktop publishing software and the multimedia 
development tool software come from the same source.  If Giant Co. 
starts using Flash on fire extinguishers, though, Giant Co. is 
probably not infringing Western's trademark.  Consumers are 
unlikely to think that the Flash software and the Flash fire 
extinguishers come from the same source.  

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."  

	Types of Works Protected
	The following types of technical and business information are 
examples of material that can be protected by trade secret law:

	  Customer lists.
	  Designs.
	  Instructional methods.
	  Manufacturing processes.
	  Documenttracking processes.
	  Formulas for producing products.

 	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.  

	Standards
	Six factors are generally used to determine whether material 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.

	Procedure for Getting Protection
	Trade secret protection attaches automatically when information of 
value to the owner is kept secret by the owner. 

	Exclusive Rights
	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 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.

	Limitations on the Exclusive Rights
	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.  

INTERNATIONAL PROTECTION
	To obtain patent, trademark, and trade secret protection in 
another country, you must comply with that country's requirements for 
obtaining protection.  For these intellectual property rights, there are 
no international conventions that provide automatic protection for U.S. 
rights owners.

CHAPTER 4
OWNERSHIP OF COPYRIGHTS

	This chapter covers the Copyright Act's ownership rules, and, in 
less detail, the ownership rules for patents, trademarks, and trade 
secrets.  Ownership rules discussed here apply only in the United States 
(other countries have their own rules of intellectual property 
ownership).
	Ownership issues that arise in specific types of relationships are 
covered in Chapters 6, 7, 8, 18, and 19.

UNDERSTANDING THE COPYRIGHT ACT
	If you are a multimedia developer or publisher, you should become 
familiar with the Copyright Act's ownership rules.  Multimedia works and 
many of their components  music, graphics, text, software, and video, 
film, and television show clips  are protected by copyright.  If you 
fail to deal with ownership issues while creating a multimedia work, you 
may not have clear title to the work and all its components.  If there 
is uncertainty concerning your title to the work, it may complicate 
distribution of the work.

Example:  April hired Don, a freelance software designer, to 
develop the software for April's multimedia work.  April and Don 
did not discuss who would own the copyright in the software.  
According to the Copyright Act's "default" rule for works created 
on commission by independent contractors, Don owns the copyright 
in the software.  

The Copyright Act's default rules on ownership apply if the parties  
employer and employee, employer and independent contractor, developer 
and client, or developer and publisher  do not reach their own 
agreement on ownership.  Those rules are discussed in "Initial 
Ownership" and "The Work Made for Hire Rule" in this chapter. 
	
INITIAL OWNERSHIP
	Ownership of copyright initially belongs to the author or authors 
of the work.  

Example:  Sarah, a photographer, took a photograph of the 
Lincoln Memorial.  Sarah is the author of the photograph and the 
initial owner of the copyright in the photograph.

	The "author" is generally the individual who created the work, but 
there is an exception for "works made for hire."  This exception is 
discussed in the next section.

THE WORK MADE FOR HIRE RULE
	The "author" of a work made for hire is the employer or hiring 
party for whom the work was prepared.  This default ownership rule is 
known as the work made for hire rule.  Unless the parties have agreed 
otherwise in a signed written document, the employer or hiring party 
owns the copyright of a work made for hire.  
	There are actually two branches to the work made for hire rule:  
one covering works made by employees, and one covering specially 
commissioned works.  We discuss these in this section.

Works Made by Employees
	A work created by an employee within the scope of his or her 
employment is a work made for hire.  The employer for whom the work is 
made is the "author" of the work for copyright purposes  and is the 
owner of the work's copyright (unless the employee and employer have 
agreed otherwise).
 
Example:  As part of his job, John, an employee of Big Co.'s 
training division, created a training film using Big Co.'s 
facilities.  Even though John created the film, Big Co. is the 
author for copyright purposes.  Big Co. owns the copyright in the 
film (unless John and Big Co. have agreed in a signed contract 
that John owns the copyright).

 	The work made for hire rule does not give employers ownership of 
works made by employees outside the scope of their employment.
 
Example:  Darryl, an engineer at Productions, Inc., wrote the 
script for Productions' newest multimedia work on his own 
initiative on weekends.  Because Darryl did not write the script 
within the scope of his employment, the work made for hire rule 
does not apply.  If Productions wants ownership of the copyright 
in the script, it must get an "assignment" (discussed in 
"Assignments," later in this chapter) from Darryl. 

	Specially Commissioned Works
	The second category of works made for hire is limited to eight 
types of specially ordered or commissioned works.  These are works 
commissioned for use as:

	  A contribution to a collective work.
	  Part of a motion picture or other audiovisual work.
	  A translation.
	  A supplementary work.
	  A compilation.
	  An instructional text.
	  A test or answer material for a test.
	  An atlas.

	For these types of works, if the hiring party and independent 
contractor creating the work agree in writing to designate the work as a 
work made for hire, the work is a work made for hire.  If the parties do 
not have an agreement to treat the independent contractor's work as a 
work made for hire, it's not a work made for hire.

Example:  April hired Don, a software developer, to design the 
software for April's multimedia work.   April and Don did not 
agree in writing to consider the software a work made for hire, so 
the software is not a work made for hire.  Don owns the copyright 
in the software.

	Even if the hiring party and independent contractor agree in 
writing to consider the independent contractor's work a work made for 
hire, the work is not a work made for hire unless it falls into one of 
the eight special categories listed in the first paragraph of this 
subsection.  

Example:  Sarah commissioned John, a freelance painter, to do an 
oil painting of Sarah's home.  Although Sarah and John agreed in 
writing that the painting would be considered a work made for 
hire, the written agreement does not make the painting a work made 
for hire because the painting is not in one of the eight 
categories of works that can be specially commissioned works made 
for hire.  

	The rules governing ownership of copyrights in works created 
before January 1, 1978 (the effective date of the Copyright Act of 
1976), were different from the rules described in this chapter.  The 
1909 Copyright Act did not distinguish between employees and independent 
contractors (works created by both independent contractors and employees 
were automatically owned by the employer or hiring party unless the 
parties agreed otherwise).  In a 1989 case, Community for Creative Non 
Violence v. Reid, the U.S. Supreme Court made it clear that the current 
Copyright Act does distinguish between employees and independent 
contractors.  
	The issue in Reid was who owned the copyright in a sculpture 
created by the artist Reid for the Community for Creative Nonviolence 
(CCNV).  The Court concluded that the work made for hire rule did not 
apply for two reasons:  Reid was not an employee of CCNV, and the 
sculpture was not one of the eight types of works that could be 
designated a work made for hire by written agreement of the parties.  

	Foreign Copyright Law
	The work made for hire rule discussed in this chapter and in other 
chapters of this book applies to copyrights in the United States.  Other 
countries have different rules on copyright ownership.  Although many 
countries have rules similar to the first branch of the Copyright Act's 
rule (works made by employees), the second branch (specially 
commissioned works) is not covered by most countries' work made for hire 
rules.  
	To obtain international copyright ownership for works that fall 
within the second branch of the Copyright Act's work made for hire rule, 
parties that commission works should obtain "assignments" of copyrights 
(see "Assignments," later in this chapter) from independent contractors.  
Ownership of independent contractors' works is discussed in "Copyright 
Ownership,"  Chapter 8.

JOINT AUTHORSHIP AND OWNERSHIP
	According to the Copyright Act, the authors of a joint work 
jointly own the copyright in the work they create.  A joint work is 
defined in Section 101 of the Copyright Act as "a work prepared by two 
or more authors with the intention that their contributions be merged 
into inseparable or interdependent parts of a unitary whole." 

Example:  Ann and Bruce worked together to create a multimedia 
work, with Ann developing the software and user interface and 
Bruce developing the content.  The work is a joint work, and Ann 
and Bruce jointly own the copyright. 

	You do not become the author of a joint work merely by 
contributing ideas or supervision to a work.  You do so by contributing 
material that meets the standards for copyright protection (see 
"Standards," Chapter 2).  

Example:  Susan suggested that John write a book on how to beat 
the stock market, and John did so.  Susan is not a joint author of 
John's book. 

 	When the copyright in a work is jointly owned, each joint owner 
can use or license the work in the United States without the consent of 
the other owner, provided that the use does not destroy the value of the 
work and the parties do not have an agreement requiring the consent of 
each owner for use or licensing.  A joint owner who licenses a work must 
share any royalties he or she receives with the other owners.  
	Many foreign countries (Germany and France, for example) require 
that all joint owners consent to the grant of a license.  Generally, 
joint ownership is not recommended because of the complications it adds 
to licensing worldwide rights.  In addition, it is unclear what effect 
the filing of bankruptcy by one joint owner would have on coowners.

COMMUNITY PROPERTY
	In nine states (Arizona, California, Idaho, Louisiana, Nevada, New 
Mexico, Texas, Washington, and Wisconsin), any property acquired during 
a marriage is jointly owned by the husband and wife.  Several years ago, 
a court in California held that the copyrights in several books created 
by a man during his marriage were jointly owned by the man and his wife.  
The court's reasoning  that the copyrights were community property 
because they were the result of one spouse's expenditure of time, 
effort, and skill during the marriage  could apply to patents, 
trademarks, and trade secrets as well.  

ASSIGNMENTS
	A transfer of copyright ownership is known as an assignment.  When 
a copyright is assigned, the assignee (individual or company to whom it 
is assigned) becomes the owner of the exclusive rights of copyright in 
the protected work.  (These rights are discussed in "The Exclusive 
Rights," Chapter 2.)  

Example:  Tom, an individual working on his own, created 
multimedia software and then assigned the copyright in the 
software to Developer.  After the assignment, Developer has the 
exclusive right to reproduce and publicly distribute the software.  
If Tom starts selling the software, he will be infringing the 
Developer's rights as copyright owner.   

	The ownership of copyright may be transferred in whole or in part.  
Examples of partial transfers are an assignment of the copyright for a 
term of 10 years (time limitation) and an assignment limited to 
California (geographic limitation).  In addition, the individual 
exclusive rights (reproduction, modification, and so forth) can be 
transferred.  
	Assignments are common in many industries  for example, music 
composers often assign copyrights in their compositions to music 
publishers.  
	An assignment is not valid unless it is in writing and is  signed 
by the owner of the rights conveyed or the owner's authorized agent.  
	An assignment can be recorded in the Copyright Office to give 
others "constructive notice" of the assignment.  Constructive notice is 
a legal term that means you are presumed to know a fact (because it is a 
matter of public record) even if you have no actual knowledge of the 
fact.  (Constructive notice is discussed in more detail in "Obtaining a 
License," Chapter 10.)
	Recording an assignment in the Copyright Office to give 
constructive notice protects the assignee from future conflicting 
transfers.  An assignment that is recorded properly within one month 
after its signing prevails over a later assignment.  If the assignment 
is signed outside the U.S., the assignee has two months to record it.  
(The benefits of recording are discussed in more detail in "Determining 
Who Owns the Copyright," Chapter 10.)


Example:  Songwriter assigned the copyright in her song to Music 
Publishing Co. in Boston on August 1, 1993.  On August 15th of the 
same year, Songwriter assigned the copyright in the same song to 
Media Enterprises.  So long as Music Publishing Co. recorded its 
assignment properly in the Copyright Office by September 1, Music 
Publishing Co. owns the copyright because its assignment prevails 
over Songwriter's later assignment to Media Enterprises.

	A properly recorded assignment even prevails over an earlier 
assignment that was not recorded if the later assignment meets two 
criteria:

	  The later assignment was taken in good faith and without notice 
of the earlier assignment.

	  The assignee paid money or something of value for the 
assignment or made a promise to pay royalties.

Example:  Author assigned the copyright in his novel to 
Publishing, Inc. on November 1, 1993.  Publishing, Inc. did not 
record the assignment.  On January 15, 1994, Author assigned the 
copyright in the same novel to Media, Inc. for $10,000.  Media, 
Inc. recorded its assignment in the Copyright Office.  So long as 
Media, Inc. acted in good faith and did not know or have reason to 
know about Author's 1993 assignment to Publishing, Inc., Media, 
Inc. owns the copyright.  The assignment to Media, Inc. prevails 
over Author's earlier assignment to Publishing, Inc.

	

LICENSES
	A license is a copyright owner's grant of permission to use a 
copyrighted work in a way that would otherwise be copyright 
infringement.  A copyright owner who grants a license is known as a 
licensor.  A party receiving a license is known as a licensee.
	Implied in every license is a promise by the licensor to refrain 
from suing the licensee for infringement based on activities within the 
scope of the license.  
	A copyright license can be exclusive or nonexclusive.  An 
exclusive license is a license that does not overlap another grant of 
rights.  
		
Example:  Author granted Publisher the exclusive right to sell 
Author's novel in the United States.  She granted Movie Developer 
the exclusive right to create and distribute a movie version of 
the novel.  Both Publisher and Developer have exclusive licenses.  
There is no overlap between the two licenses.

	Under copyright law, an exclusive license is considered a transfer 
of copyright ownership.  An exclusive license, like an assignment, is 
not valid unless it is in writing and signed by the owner of the rights 
conveyed.  A nonexclusive license is valid even if it is not in writing.  
	An exclusive license, like an assignment, can be recorded in the 
Copyright Office to give constructive notice.  Recording the exclusive 
license protects the license against unrecorded earlier transfers of 
copyright ownership and against later transfers.  (See "Assignments," 
earlier in this chapter.)
	Licensing is discussed in detail in Chapter 10.

TERMINATION RIGHT
	The author of a work other than a work made for hire has the right 
to terminate any license or assignment granted on or after January 1, 
1978 during a fiveyear period that starts 35 years after the grant was 
made.  If the grant involves the right to distribute the work to the 
public, the termination period begins 35 years after distribution begins 
or 40 years after the grant was made, whichever is earlier.  For works 
published before January 1, 1978, the fiveyear termination period 
begins fiftysix years after the work was first published.
	The termination right cannot be waived in advance.  If the author 
dies before the termination period begins, the termination right can be 
exercised by the author's widow or widower, children, and 
grandchildren.			

OWNING A COPY OF A WORK
	Copyright law distinguishes the ownership of a copy of a protected 
work (a print of a photograph, a compact disc, a book, a diskette) from 
ownership of the intangible copyright rights.  The transfer of a copy of 
a work does not transfer any rights in the copyright.  Thus, purchasing 
a book (a copy of a literary work, in copyright terminology) does not 
give you permission to make copies of the book and sell those copies.  
	There are two exceptions to the preceding paragraph's first 
sentence.  If you buy a copy of a work, you have a right to resell 
(distribute) that copy.  This exception is known as the "first sale 
doctrine."  You also have the right to display your copy publicly, 
"either directly or by the projection of no more than one image at a 
time, to viewers present at the place where the copy is located."  These 
two exceptions do not give you any right to exercise the copyright 
owner's reproduction, modification, or public performance rights.  (The 
five exclusive rights are discussed in "The Exclusive Rights," Chapter 
2). 

Example:  Don bought a copy of Publisher's multimedia work.  Don 
can resell his copy of the work.  The "first sale doctrine" gives 
him that right.  If he makes copies of the work, though, he will 
be infringing Publisher's copyright. 	

 
PATENTS, TRADEMARKS, AND TRADE SECRETS
	Patent law does not have a work made for hire rule.  Patentable 
inventions created by employees within the scope of their employment are 
owned by the employee.  However, the employee may have a legal 
obligation to transfer ownership to the employer under patent law's 
"hired to invent" doctrine. This doctrine provides that when an employee 
is hired to perform research or solve a specific problem, the employer 
is entitled to get an assignment of a patent received by the employee on 
the results of the research.  
	Generally, as a condition of employment, employers require 
employees to agree to assign their interests in patentable inventions to 
the employer.  The Patent Act implicitly recognizes the validity of such 
agreements, providing that a patent may be granted to the assignee of 
the inventor.   
	A trademark is owned by the first party to use it in connection 
with goods or services or the first to apply to register it.  A 
trademark can be owned by an individual, company, or any other legal 
entity.  Trademark rights are discussed extensively in Chapter 15.
	An employer or hiring party generally owns trade secrets developed 
by employees and by independent contractors who are hired to invent. 
	Ownership of patents, trade secrets, and trademarks, like the 
ownership of copyrights, can be assigned.  As with copyrights, owners of 
these types of intellectual property frequently grant licenses 
authorizing others to do things that would otherwise violate the owner's 
exclusive rights.

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LICENSE NOTICE:  This selection  may be copied in its entirety for 
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of the authors. This selection is from the Multimedia Law Handbook which 
is designed to provide accurate information on  the legal issues in 
multimedia. This selection 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.


