| Many producers want to incorporate pre-existing works into their multimedia productions. This may involve putting a dictionary on a CD-ROM or producing a disk incorporating music from Mozart with accompanying text and photos. There are several problems one encounters when trying to license pre-existing works.
A. UNCERTAIN MARKET
Content owners do not know what to charge to license material for multimedia use. CBS Inc. is reportedly charging fifteen dollars a second for material in its library. Many companies have adopted a wait-and-see attitude because they are afraid to sell rights at below market rates. Of course, if companies continue to stand on the sidelines, the market will develop slowly.
The amount of money that a producer can afford to pay and still recoup his investment is relatively small at this time because of the limited market for the end-product. Today, only a few million computer users have CD-ROM players. Retail sales of CD-ROM programs are in the twenty thousand to thirty thousand range, although the market is expected to expand greatly.
B. CLEARANCE PROBLEMS
Owners of existing works may not hold all the necessary rights needed to exploit their properties as multimedia programs. Multimedia and electronic publishing did not exist when most contracts were negotiated, so the question of who owns such rights may be unclear. As a practical matter, old contracts may have been lost and can be difficult to locate.
A Multimedia producer, for instance, cannot buy the right to put content on a CD-ROM disk if the seller does not own those rights. The language of many contracts does not specifically address multimedia rights because multimedia is a new medium. A contract might provide that a novelist is granting a studio the right to turn a novel into a motion picture. The grant of rights may include "all allied rights." Under this language, who now owns the electronic publishing rights to the novel? The studio may claim the rights arguing that it is an "allied right." The writer may disagree, contending that the parties never intended to transfer electronic publishing rights because electronic publishing did not even exist when the contract was made.
When a studio gives a multimedia producer a license to use its footage in a new interactive program, the grant may be on the basis of a quit claim release. Here, the studio sells only those rights that it may own, without promising that it owns any rights. The multimedia producer may need to examine the contracts that purportedly gave the studio these rights in order to determine the extent of the rights the studio owns. The studio, however, may not want to reveal contents of its contracts.
Whether a studio owns the right to exploit a film as a multimedia project will often turn on the language in the contracts that the studio used to acquire rights to works incorporated in the film. The case law in this area is confusing and somewhat contradictory. In one line of cases, the courts assume that a licensee may use a property in any manner that appears to fall within the scope of the contract granting those rights.1 In these decisions, the courts assume that a grant of rights covers new uses or new media if the words conveying the grant are susceptible to that interpretation even if such new uses are not specified.2 Thus, an assignment of motion picture rights to a play has been held to include the right to broadcast the film on television even though television did not exist at the time the contract was made.3
In another line of cases, the courts assume that a grant of rights only extends to those uses that are clearly within the scope of the rights conveyed. In Cohen v. Paramount Pictures Corp.,4 a composer granted to a production company the right to use his music in the film "Medium Cool." The grant included the right to use the composition by means of television including exhibition by pay television and subscription television. The contract reserved to the composer all other rights. When Paramount began to distribute the film in the form of videocassettes, the composer sued on the grounds that his prior grant of rights did not include exhibition by home video. The Ninth Circuit Court of Appeals agreed.5
C. FEAR OF DIGITALIZATION
Owners are concerned that if they let their work be digitized, the work will be easily pirated by others. In digitalization, the image is converted into a series of pixels or dots. Once a work is digitized, subsequent generations can be copied without any loss in quality. Furthermore, the image can be manipulated and changed so that it does not look like the original. Multiple images can be metamorphosed into new hybrids, a practice called "morphing." Moreover, ready access to computer networks and bulletin boards can compound the damage by making it easy and inexpensive to distribute pirated works to vast numbers of users.
Refusing to allow one's work to be digitized, however, does not necessarily stop thievery. A determined pirate can steal an image by simply scanning it into a computer.
Assuming the owner of a work is willing to license it for multimedia use, a multitude of legal issues may arise.
Footnotes and citations:
1 3 Nimmer on Copyright 10-86.
2 Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150 (2d Cir. 1968).
3 Id.
4 Cohen v. Paramount Pictures Corp., 845 F.2d 851 (9th Cir. 1988).
5 Id.
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