STRATEGIES FOR SURVIVING THE MINEFIELD OF MULTIMEDIA COPYRIGHT OWNERSHIP

The nature of multimedia, being projects involving the integration of several different media in one work, leads to often complex issues of copyright ownership. So where do you start?

The proliferation of digital technology to record many audio-visual components on the one medium, commonly a compact disc, has seen a surge in the interest in multimedia products. As with many areas of technological advancement, our legislators are slow to react to rapid changes to commercial reality and our laws are often antiquated or simply obsolete. There has been much discussion regarding the need for changes to be made to our copyright legislation but to date there has been little change been made to the relevant act.

The current Copyright Act 1968 does not classify multimedia as an individual category of work for the purposes of copyright protection. As a result the copyright of a multimedia product must be examined separately for each component of the product to determine the copyright owner and the duration of the copyright.

If you are involved in developing a multimedia project, it is important to have a written agreement which includes a clear definition of who will own the intellectual property of each component and the final product due to, amongst other things, section 196 of the Copyright Act. That section, amongst other things, states that copyright may only be assigned in writing under the signature of the Assignor (creator / artist). Accordingly, consideration should be given to signed invoices and purchase orders which clearly state the Copyright and the medium in which the copyright is to pass.

ie. Purchase Order/Invoice
Purchase of Copyright in Photographs, Artwork, Script, Computer Programs as listed $
Signed Artist/Supplier

A properly maintained asset register of your intellectual property which states, amongst other things, who the creator of the works was, the nationality of the author, the date of creation, the source materials used and how the asset was vested in the institute is invaluable in this respect. Other aspects of the Institute management can also be controlled by such a register such as version control and preparation of materials for certification etc.

Further, an Intellectual Property policy may be of great assistance in determining your situation with respect to employee created works and proving some scope for staff to become more prolific creators of works.

It is unusual to have the same creator for each component of the multimedia product being developed. If you are paying someone to develop one of the components, then as stated above, you can have an agreement to define who is the copyright owner of that work. However, if you or your client wishes to use a substantial part of non-original text, photos, music, computer software or other artistic works it will be necessary to obtain the permission from the copyright owner to use that work in your product.

That sounds easy enough, but have you considered the time and money required to determine who is the copyright owner? This step is easily overlooked when you are preparing a quote or planning your delivery date.

• In some cases the copyright owner will be the author or artist who produced the work.
• If the author or artist was engaged under an employment contract to create the work, the copyright owner may be the employer.
• The work may have been commissioned and the copyright owned by the commissioning party.
• There may have been an assignment of copyright to a third party.

Once you have determined who the copyright owner is and where to locate them you must negotiate with that party to either obtain an assignment of the copyright or an appropriate licence to use the copyright work.

The copyright owner may wish to charge a fee for allowing you to incorporate their work into your product. Further negotiations must be conducted to determine whether the payment will be by way of:

• royalties - these could be calculated per numbers manufactured or sold. What happens with remainders or returns? Who will be responsible for the costs of administrating the payment of royalties? Will an advance payment or a minimum guaranteed payment be required?
• profit share - how will costs be calculated and accounted for? Will you be using gross or net profit? Will your accounts need to be audited?

Further, some media libraries may or may not be the copyright owner of the materials they supply for the forms in which same is used. You should carefully check the terms and conditions on which such materials are supplied. ie. Are they for electronic distribution?

The copyright owner may also have requirements that you protect their interest for example by preventing their work from being reproduced directly from the multimedia product and having their copyright markings and acknowledgments within your product.

As you can see, if your client requests that you use a particular photograph or song in the product, it is necessary to obtain a disclaimer from your client that they are the copyright owner and that they will indemnify you against any claims if they are not the copyright owner. If this has not been provided, make sure you include in your budgeting the costs of obtaining this information and permission from the owner yourself.

Have you noticed that when things are going well, a co-operative spirit exists amongst all participants, however, when complications arise, everyone including your staff, students and clients may quickly become unco-operative or hostile.

A written agreement is the best way to ensure that all parties are clear as to what their rights and obligations are. An oral agreement can easily result in confusion as to the representations made by each party, especially if negotiations occur over a protracted period, and are often completely denied in cases of litigation.

As a developer, or customer you should ensure that a multimedia development agreement includes, amongst other things, the following issues:

• What is the liability of the developer for loss or damage caused by the fault in the product?
• Who is responsible to obtain third parties' permission to use copyright works and determine their remuneration, if any?
• Who owns the intellectual property rights in the product?
• What are the development stages and what are the penalties for non-compliance with the development schedule
• What will be classified as a variation of the original specifications and what are the developer's rights to increase the fee and time allowed for the project?
• What will be the acceptance tests and what will be the consequences should the product fail the acceptance tests?
• What are the developer's obligations for maintenance, insurance and warranties?
• What is the payment schedule?
• What resources will be supplied by the developer and is there any restriction on which personnel will be involved in the development?
• How can the agreement be terminated?

Just when you thought that your problems were over, you should also consider the copyright issues which arise with employees and contractors.

An employer owns the copyright in any work that they have paid their employees to create however complications may arise if an employee incorporates a work that they have created into one which is being created for their employer and there is the age old complaint…. but what about all the work I did on that project in my own time after hours!!! A written employment contract can clearly define who is the copyright owner in all works created and what the employer's policy is with respect of use of third parties' materials in works created for the employer.

A contractor, on the other hand, retains the copyright in works created unless there is an agreement to assign the copyright.

We have attached a summary of the default copyright owners and the duration of the copyright. As discussed previously, each component of a multimedia product will have to be examined separately until a multimedia product is considered to be an individual category of work for the purposes of copyright protection.

In Australia, copyright does not have to be registered and arises on creation of the artistic work. In some countries, for example the USA, you can register your copyright for additional protection.

Although not compulsory, you should mark your materials with the copyright symbol, the date of creation and the name of the copyright owner. For example:

The Trade Practices Act provides a frequent source of problems and remedies to clients. The relevant provisions are as follows :

Section 52 (1) A Corporation shall not in trade and commence engage in conduct that is misleading or deceptive or likely to mislead and deceive.

Section 53. A Corporation shall not in trade and commence, in connexion with the supply of goods and services or in connexion with the promotion by any means of the supply or use of goods or services -

1. falsely represent that goods are of a particular standard, quality, value, grade, composition, style or model or have a particular history or particular previous use;
   1. falsely represent that services are of a particular standard, quality, value or grade;
2. falsely represent that goods are new;
   1. falsely represent that a particular person has agreed to acquire goods or services;
3. represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;
4. represent that the corporation has a sponsorship, approval or affiliation it does not have;
5. make false or misleading representation with respect to the price of goods or services;
   1. make a false or misleading representation concerning the availability of facilities for the repair of goods or of spare parts for goods;
   2. make a false or misleading representation concerning the place of origin of goods;
6. make a false or misleading representation concerning the need for any goods or services; or
7. make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.

Section 55 A person shall not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods.

Section 55A A corporation shall not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the characteristics, the suitability for their purpose or the quantity of any services.

The following is an excerpt from a recent newsletter (which is sent to our clients and others who are interested without charge. Please contact the author if you are interested in receiving same)

“Duff” Beer In May 1996, the South Australian Brewing Company was found to have breached Section 52 of the Trade Practices Act (misleading and deceptive conduct) and had falsely passed off its “Duff” beer as being associated with “The Simpsons” TV program.

The Duff beer label was found to achieve and exploit a strong association between “Duff Beer” and “the Simpsons” which was deceptive and was unsuccessful in avoiding legal liability. Readers may recall that “Duff Beer” appears frequently in the hands of Homer Simpson in the television program.

The Court made orders that the brewery was: restrained permanently from promoting, selling or otherwise dealing with any product in a “Duff beer can”; ordered to destroy all stocks of packaging and unsold stock of the product in the Duff beer can; and provide an account of profits or damages at the election of Twentieth Century Fox Film Corporation and Matt Groening.

Further, in a later decision, the Court considered warnings such as “Not Authorised by the Simpsons” insufficient.

The first you will most likely hear of a dispute is a solicitor's letter asking you to either cease and desist using the materials and/or pay a licence fee. It is important to obtain appropriate advice as it is possible that the claim may be an unjustifiable threat of action which could entitle you to sue the persons asserting a copyright. Further, with correct management it is possible to avoid expensive recalls of product and claims for excessive royalties/damages.

Alternatively, a party may commence proceedings before the Court without notice in more flagrant cases of infringement. Advice should be sought as soon as possible.

As in all matters, prior preparation can save a great deal of time and money in the long run. Be proactive regarding your copyright issues and you should hopefully encounter few complications with your multimedia development projects. Don't forget to:

• Have An Intellectual Property Policy.
• Have An Intellectual Property Asset Register.
• Obtain copyright assignments where appropriate.
• Use written agreements
• Have a Trade Practices Compliance Officer
• and be alert to the issues.

STEVE WHITE
WHITE SW COMPUTER LAW
OCTOBER 1996 www.computerlaw.com.au © White SW Computer Law 1996 This article is a guide only and should not be used as a substitute for proper legal advice, readers should make their own enquiries and seek appropriate legal advice.