In a series of articles we will be focusing on 2 sets of issues which are relevant to the business of multimedia. First, intellectual property rights and rights clearance. Second, structuring and financing new businesses.


Clearing rights for multimedia products
Because of the differences between national copyright systems, and the principle of "national treatment" explained above, rights have to be cleared in each territory where the product is to be distributed. Each territory's laws governing who owns the rights, how long they last and how they can be licensed or acquired may differ, sometimes significantly. So it is necessary to assess which territories are important to the product so that further research and investigation of the rights position can be undertaken.

A multimedia work such as a CD-ROM product can incorporate various categories of material, some or all or which will be protected under various rules such as copyright, performers' right and moral rights. Below is a description of the main types of works that are likely to be included in a CD-ROM or CD-I product, and an indication of some special problems that may arise in clearing their usage.

Computer programs: In developing a multimedia product for publication it is necessary to draw a distinction between those programs that are used purely while preparing a product for publication and those that are actually part of the finished product. For example, video and graphics editing programs will normally be used in production process for a multimedia CD in order to prepare and compress the video clips and graphics but would not normally be distributed as part of the finished product. By contrast many multimedia authoring tools will not only be used in the process of developing the product but will also include a "player" or "runtime" component which will need to be included on the CD as part of the system which will run the finished product. In addition to the player, various other programs will normally be found on the finished product. These will include the scripts and other program objects which are developed as part of the product development process and which control the player/runtime component. In addition, because of the increasingly "open" nature of many authoring tools, there may be third party programs which extend the functionality of the basic authoring tool. These may provide, for example, video codecs, faster graphics handling or special sound or text manipulation features.

From the publisher's or producer's point of view, the crucial issue is to ensure that the appropriate licences have been obtained from the owners of the rights in all of these programs. In the case of tools used only in the production process, whoever is using the programs will need an "end-user" licence and its terms should be checked to ensure that it does not contain any unusual restrictions. Extra care needs to be taken in the case of programs such as authoring tools and third party extensions to ensure that you obtain a licence to distribute the components, normally on a worldwide basis. Naturally the fees payable and ease of licensing will be a factor in the producer's choice of programs.

The programs and scripts created in the course of development of the product will themselves be protected by copyright in most jurisdictions. It is important for the producer to ensure that ownership of the rights lies in the right hands. In many jurisdictions, computer programs written by employees will belong to their employer but this will not always be the case for programs written by freelance contractors. As national rules can diverge, it is best for the question of ownership to be dealt with specifically by contract.

Films: the use of video clips is becoming more popular. National rules on ownership of rights in films vary significantly between countries and are often overlaid by relatively complex contractual arrangements. Many films will have undergone changes of ownership following their initial production, perhaps as the result of financing transactions or library sales. The CD rights may have followed. Alternatively, the relevant rights for certain territories may have been sold outright to a distributor (often a video distributor for older films although contracts nowadays tend increasingly to differentiate the CD rights from the video rights). There is no central clearance society or organisation for these rights. The rights have to be cleared directly with the actual owner. Most mainstream films will not be difficult to trace, but for more obscure films, it may be possible to trace through AGICOA, the European society which clears cable retransmission of films. They maintain a database of rights information but these cannot be accessed by the public so the request should be through a member. There are other national collecting organisations in other European countries (such as the Centre National de la Cinematographie in France) that may have copyright information on films.

The original ownership position for films is set to change in the EC for new films with the passing of the European Directive harmonising the term of copyright. The principal director must now be considered as one of owners of the film copyright, though each EU member state remains free to designate others as co-owners so harmonisation is only partial. Pan-European distribution of new film clips will therefore remain complicated as publishers will have to ensure that they license the necessary film copyrights not only from the distributor, but also from all the other designated co-owners, which could include screenwriters, composers and other main creative contributors.

Many countries protect individual frames of films through copyright, so permission will be required for single frame reproductions.

Musical works: clearing musical works (as opposed to sound recordings of musical works) is fairly straightforward by comparison with other categories of work. Most European countries have collecting societies which are responsible for granting licences for the use of music in recordings, and through reciprocal representation agreements clear the rights for rights owners from other countries.

Sound recordings: these can be more difficult to clear. Rock and pop records can often be cleared directly with the record company or sometimes through the organisations which represent record companies (such as BPI in the UK). Because of the expense involved, it is preferable to avoid the use of rock and pop records if possible. There are several production music libraries which maintain a wide range of music for use as background and production music, and it is generally cheaper minute for minute to use this type of music.

Stills: many stills are distributed by picture libraries, who will grant what are generally known as "reproduction rights". Obtaining stills from a picture library is no guarantee of clearing the rights to the picture itself, as there are many library stills in which the copyright is owned by a third party, and most picture library terms and conditions expressly disclaim responsibility for copyright clearance. The actual copyright owner will have to be traced independently although the library may have the requisite information. If the still is of a work of art, there may be a separate copyright to be cleared for that work, although there are organisations (such as SPADEM/ADAGP, BILD KUNST, and DACS) through whom art works can be cleared. Works such as designed items of clothing, or film or theatre sets, which can have separate copyrights, may need to be cleared as well.

Text: pre-existing text is generally cleared direct with the author or the author's assignee, and it would be wise to obtain a publisher's release from the author's publisher as well, covering any rights or consents that may be needed from the publisher. Specially-commissioned text should be cleared through the commissioning arrangements with the author. If an author of specially-commissioned text is represented by a publisher, a publisher's consent would be prudent.

Employee/freelancer issues: Check the status of creative talent who are involved in developing new copyright works such as graphics, text, or programming lines. If they are not actual employees of the business developing the product there is a risk that the creative talent may retain copyright ownership of what they create, unless they have signed an agreement to the contrary. The development company may rely on an implication that, as it has paid money to the creative talent, it was intended that copyright would transfer, but it is normally not safe to rely on this. Because of the considerable amount of image sound and text manipulation which is involved in a CD product, it is also important that the creators have waived their moral rights to their work. If physical copies of the CD product are to be exploited by rental, the rental rights of the author under EC Directive 92/100 (see legal Viewpoint No 1) will be a factor, and all contracts with employees and freelancers should by now have begun to deal with the issue. The directive requires that authors (amongst others) receive an "equitable remuneration" for rental of their work. What is equitable has yet to be clarified by national legislation implementing the directive.

Performers' rights: along with copyright, those whose performances appear in films and sound recording must give their consent to the use of that performance in a CD product. With luck, the production company will have obtained wide performers' rights clearance before original production of the film (similarly for sound recordings), but this cannot always be guaranteed, and needs to be checked.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.