Property Rights in the Electronic Dawn

by Donna A. Demac

Originally published in REFLEX, August/September 1994

In the coming years, instantaneous computer transmission, electronic reproduction, and text and image manipulation are destined to change the way information is treated as property. Already multimedia discs, network information nodes, and a variety of information services accessible by anyone with a personal computer complicate the concept of ownership. The development of computer software by teams of writers, interface designers, and others, challenge the notion of authorship. Also signficant, the very organization of a digital work is often up to the user.

The customs of the art world are changing. The use of digitized museum art collections in multi-media productions and electronic transmission creates a new set of possibilities and problems. Not long ago, The Microsoft Art Gallery, containing the digitized collection of the National Gallery of Art in London, received the first-ever CD-ROM review in The Sunday New York Times Book Review. QVC of home-shopping fame, ABC Interactive, Seventh Level Interactive, and numerous other companies also have sought to become players in the multi-media marketplace, approaching museums with license offers and lucrative opportunities to which the (often financially hard-pressed) museums must respond. Increasingly, museums are initiating interactive exhibits on their own. Collaboration among museums is a growing trend, made attractive by the enormous costs of training, acquiring technology, and marketing computerized museum products and exhibits.

The uncertain legalities of these proposals and contractual arrangements has sometimes caused museums to fear they are being taken advantage of and led, in some cases, to delays in order to avoid major blunders. Friction between electronic publishers and museum representatives flared at the International Illustrated Book and New Media Publishing Market [MILIA] conference in Europe last fall. As reported in the May 1994 issue of CD-ROM World, representatives from museums charged that U.S. firms were trying to pillage their collections.

The new world of digital reproduction of the arts raises a crucial rights issues, including basic questions about the copyright scheme of entitlement as developed over the past several hundred years. It is not too early to try to establish some standards of content ownership, artist's rights, and access to a museum's electronic arts materials.

Rights issues tend to be the starting point in any electronic media proposal. Historically, the law has always lagged behind technological developments. It is likely to take more experience and time before adequate legislation can be formulated. Until then, stakeholders in computerized media and art must rely on new contract provisions, payment schemes, technological safeguards, and accounting procedures to accomplish what existing law, by itself, cannot. Yet the historic principle of control of work by the originator/copyright holder, and also the principles of the value to society of perpetuating public knowledge about such work, remain essential to the artist, the museum, and the public.

Article I, section VIII of the U.S. Constitution states: The Congress shall have Power... To Promote the Progress of Science and Useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries. This language indicates that copyright does not last forever - in time, a work passes into the public domain. In addition, copyright and patent laws are intended to be implemented in ways that promote public learning.

Is it too glum to suggest that this emphasis on learning has been sidelined in the current electronic gold rush? What are the commercial ends of a museum's digital push; what are the noncommercial ends? At what point in the plan should noncommercial objectives be factored in? One recent legislative trend runs toward moral rights laws, which protect the noncommercial rights of the artist: preserving the integrity of the work and the right to be credited for producing a work.

Long dismissed under U.S. copyright law, moral rights have a strong basis in most European law. They stand for the notion that the creator has an inherent right in the creative work that cannot be sold and does not pass on to heirs. Moral rights are inalienable regardless of any permission granted by the purchasers of the work, and thus are generally out of sync with a free market outlook. Yet,the U.S. will need to bestow increasing moral rights, if it is to trade on a basis of reciprocity with European countries and other countries that have become part of the international Berne copyright treaty - which includes moral rights.

Ironically, in the United States, moral rights legislation was first passed in 1990, even as more copies of artistic works were being used in video games, CD-ROMs, product advertisements and packaging. Indeed, the visual power of these images gives them an ever-increasing market power. Section 106A of the Copyright Act, often referred to as the Visual Artists Rights Act of 1990 (VARA), contains the limited scope of moral rights legislation at the federal level and provides protection similar to that found in European laws. It focuses on two moral rights pertaining to attribution and preservation of the integrity of the work. The right of attribution allows artists to claim or disown authorship of a work and to prevent their names from being associated with the work if it has been distorted or modified. The right of integrity allows the artist to halt destruction, but only if the work is of recognized stature.

VARA's scope is limited to protecting original pieces of art, including paintings, drawings, prints, still photographs and sculptures created on or after June 1, 1991. Whether or not the same moral rights may apply to digitized art is open to question. The role of museums further complicates the issue, since they can play multifaceted roles as the owners, creators, licensers and licensees of copyrighted works. Further, a number of states adopted their own moral rights laws during the 1980s. Most of these are specifically concerned with mutilation of fine art and empower artists in relation in such instances.

From the software developer's perspective,the costs of aquiring rights, whether for original or preexisting material, has become a central issue in planning interactive materials. The beauty of interactive products is the vast amount of information they contain: text, still photographs, full motion video, animation, sound (both voice-over as well as music) and accompanying print materials. This same wealth also creates the problem, however. The rights to all of this material must be secured (with rare exceptions as discussed below) before such materials may be included in a program. After having cleared all of the rights and set the applicable license fees, the software producer may be left with a project so top-heavy in rights costs that it is not commercially viable.

Furthermore, each type of work, whether it be writing, photographic images, visual arts, music, or film, has its own wrinkles and body of law. This complexity has led more than one commentator to lament the expense involved in securing the many rights underlying a multimedia computerized project - what is sometimes called the multimedia blitz.

Rights to materials created specifically for a project must be granted to all of those individuals involved in their creation: the writers, actors, directors, musicians, software developers, and technical producers. One avenue which software producers take is to acquire these rights on a work made for hire basis, giving the software owner the copyright in such materials. It is an area of growing importance in the financing of electronic media that involves in-house production, in which some elements require contractors on a "work made for hire" basis. The obvious advantage of this arrangement for the producer is that the party commissioning creation of the work, or the employer, is deemed to be the owner of all rights in such materials.

Under the work for hire doctrine, the copyright to a work prepared by an employee in the scope of his or her employment will belong to the employer, although it can be somewhat complicated to determine when an employment relationship, rather than an independent contractor relationship, exists; in some cases an artist, or technical consultant, may retain a full or partial copyright. Similarly, one might structure the relationship as work especially ordered or commissioned for hire. Under such an arrangement, for example, the producer as the commissioning party may own the copyright to the work done for a project by a free-lance musician. As long as a written agreement reflecting these terms sets forth that the producer owns all rights, including the copyright, in the work, then the work will be deemed a work made for hire. Alternatively, a software producer may license limited usage rights from the creator. Again, a signed written assignment or license of any of the copyright holders rights is advised.

Most multimedia producers want to incorporate at least some preexisting material, be it photographs, written text, film, footage or music, in their products. Because preexisting material may already be protected by copyright, the acquisition of the right to use such material is more complicated. There are three issues that determine whether the material is subject to copyright protection: 1) Is the material of the nature which woulGNU'S Not UNIXd lend itself to copyright protection? 2) Is the material nonetheless in the public domain? 3) Would the producer's use be deemed fair use?

To be copyrightable, material must be an original work of authorship, not mere facts. There must be a certain level of creativity in the expression of an idea. Only the expression of an idea, and not the idea itself, is copyrightable. Thus, non-fictional works, which by definition recite facts or set forth information, are subject to a lesser degree of copyright protection than fictional works. For example, it has been held that the white pages of a phone book, that is, a mere alphabetical arrangement of names and addresses, is not copyrightable, while the yellow pages, which may require some level of creativity in organizing the compilation, probably would be copyrightable.

Material is in the public domain if the material could have been but was not copyrighted, or was copyrighted but such protection has lapsed either as a matter of the passage of time or as a result of non-compliance with copyright protection. Public domain material can be used by anybody, in any way, without permission. There are vast stores of material in the public domain. Any work that was not copyrighted properly in the first place or was entirely created and published by a Federal Agency is public domain. Any work produced more than 75 years ago is public domain in the United States, since 75 years was the maximum term of protection before the 1978 Copyright Law went into effect.

The copyright in a derivative work containing public domain material extends protection only to the newly created work and not to the public domain material. Thus, the public domain material is still available. For example, a colorization film company which colorizes a public domain black and white film may secure copyright in the colorized film, but the underlying black and white film remains in the public domain.

In order to reuse preexisting materials, the software producer must identify the owner of the copyright in such materials. Frequently, this identification process is more complicated than one might expect. Paintings that have been donated to the museum may carry restrictions; the donor may be deceased. Or the museum may be unsure as to who has the rights on behalf of the original artist of a given work. Similarly, sound recordings, or records, may have been owned by labels that are no longer actively in business, and it is difficult to trace the disposition of the assets of defunct businesses. Music publishers, which own the rights to musical compositions, are often very difficult to locate. Thus, multimedia production may require some detective work (and/or an experienced clearance consultant).

It is also important to identify all of the owners of rights. Under copyright law, any co-owner of copyrighted materials may license such materials; however, this can be and often is varied by contract. The software developer must be satisfied that the co-owner with whom one is dealing has the right to license the materials on behalf of all of the co-owners.

Further, there may be one owner of a copyright in the materials in question, but within that copyrighted work there may be included separately copyrighted materials: An audiovisual work may incorporate various elements, some of which are owned or controlled by the owner of the copyright of the audiovisual work and some of which are owned by a third party and have merely been licensed for limited use in the work. In the case of a motion picture, the copyright in the screenplay is almost always owned by the producer, as is much of the musical score.

Ultimately, the rights granted by a copyright holder to a developer cover three main issues: the geographic scope of the rights, the formats in which the rights may be exercised, and the duration of those rights. The software developer may want the right to distribute the work throughout the world; some may ask for rights in all possible formats.Ó These requests have become the subjects of arduous negotiation and are often linked to the size of the licensing fee and related services. Important licensing questions to consider are: Is this license for one-time use? Is it for worldwide distribution? Will sublicensing be allowed? Also, a principle relevant to most deals is that the developer forfeits rights to any products which they have not exploited within a given period of time.

Other issues surround the assembly of multimedia software, such as possible conflicts of interest, creative control, and questions of compensation. They, as well as the broader rights issues, will need to come to a solution that draws an equitable balance between software developers, artists, audiences, and the museums that are playing so central a role in creating the new multimedia projects.

The active interest in content rights on the part of artists, corporate owners, and users points to a historic change in the social organization of communications. The transformation of the passive media consumer into a more selective, expressive user of interactive electronic communications may bring about the new dawn of multimedia.


Donna A. Demac, attorney, is a Senior Research Associate at the Institute for Learning Technologies at Columbia University.