Anticipate New Technologies When Drafting Copyright Licenses

With so much money to be made from DVD sales, entertainment companies need to make sure they have secured all the necessary copyrights to release these works in the DVD format.

If you long to see your favorite old television shows or movies again, chances are they are readily available on DVD at your local video store.

DVD sales are skyrocketing, based in large part upon the release of boxed sets of entire seasons of TV shows, or old movies supplemented with a range of extras. With so much money to be made from DVD sales, entertainment companies need to make sure they have secured all the necessary copyrights to release these works in the DVD format.

Difficulty often arises, however, because the ability to create and disseminate a TV show in the DVD format can hinge upon the copyrights secured in the original agreements when the series or work was first produced.

The language used in these agreements continues to govern use of the copyrighted material, even when changing technology makes new uses of the work possible. As technology evolves, the scope of the rights granted, transferred and retained may become unclear, especially when the new medium was not anticipated at the time the agreement was drafted.

With technology and media changing at a rapid pace, entertainment companies and their attorneys should state and understand with certainty which rights, if any, are to be retained by the granting party, and which are transferred by agreement. Drafting attorneys face the perpetual challenge of drafting agreements to protect the client's rights in light of unforeseen future developments in technology. Construing existing agreements can be an even more difficult task.

These issues have become even more complicated as recent copyright-infringement cases over so-called "new uses" have influenced the way in which existing agreements are construed. Recent "new use" cases such as New York Times v. Tasini and Random House Inc. v. Rosetta Books LLC signal a shift on the part of courts toward favoring the rights of the original copyright holder or licensor.

In Tasini, plaintiff freelance authors wrote articles for The New York Times and claimed that the copyrights were infringed when the newspaper later licensed rights to copy and sell the articles to LEXIS/NEXIS. The court held that neither the agreements with the authors nor prevailing copyright law granted The New York Times the right to reproduce the articles in electronic databases.

In Rosetta Books, defendant Random House had been granted the right to print, publish and sell certain authors' works in book form but subsequently sold those same works in digital format over the Internet as a collection of "e-books." The court relied on the language of the agreements and basic principles of contract interpretation in finding that the contracts did not include the right to publish the works as e-books.

These cases provide valuable lessons for attorneys when drafting copyright agreements. There are three key points to keep in mind:

1. Clarify the rights granted and retained.

To minimize ambiguity, the party acquiring the rights should make every effort to define the rights granted in an agreement as broadly as possible, by using catch-all descriptions to encompass all media, in all forms now and in the future, so that there are no ambiguities as to which party owns the rights to each type of exploitation.

Obviously, if the relative bargaining position of the parties allows the copyright holder to retain certain rights, they would also want to make sure that their retained rights are defined as broadly as possible.

2. Try to anticipate the unknown.

Agreements written for TV shows or movies produced years ago never contemplated the DVD format, and certainly there will be new technologies in the coming years that cannot be imagined now. With this in mind, the drafting attorney should make certain that the language anticipates any and all potential changes in media and technology. This is especially important when the parties do not agree on terms that would, in effect, be the equivalent of a transfer of all rights in all media.

As technology changes, producers often want the right to rerelease works in different media. Unless the agreement expressly grants the right to use or disseminate the work in that specific medium, such a new or different use may have been retained by the author or creator of the work. If the agreement leaves room for interpretation as to whether this new medium is included in the grant, courts will likely strictly construe the language, thus reserving the rights to any new medium for the party that created the work.

3. Obtain written consents.

Grantees of copyrighted work looking to take advantage of new uses for that material should review existing agreements carefully. If there is doubt as to whether the intended new use is included, it would be wise to obtain a consent or a waiver from the author or original grantor of the work granting permission to exploit the work in the new medium. The consent or waiver should be as broad as possible so that a new waiver is not needed for every medium later invented.

Obtaining the necessary consent or waiver can help avoid lengthy and expensive litigation over the use of the work, and even though there will be costs involved, the certainty and goodwill may well be worthwhile.

By clarifying the rights granted, anticipating the unknown and obtaining consents, entertainment companies can protect valuable rights to their programs and exploit evolving technology effectively, even when there is no way to know exactly what the future holds.

Karen Artz Ash is a partner and national co-chairperson of the intellectual-property department at Katten Muchin Zavis Rosenman in New York.

Bret J. Danow is an associate in the firm's IP department.