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490 PLI/Pat 481
Practising Law Institute
Patents, Copyrights, Trademarks, and Literary Property Course Handbook Series
PLI Order No. G4-4008
September, 1997

PLI's Third Annual Institute for Intellectual Property Law


Anne Hiaring

Copyright (c) 1997 Anne Hiaring. All Rights Reserved.


I. Introduction
A. Sample Fact Pattern
B. Issues Checklist
1. Copyright Rights
2. Rights of Publicity
3. Trademark Rights
4. Contractual Rights

II. Copyright Rights
A. Clearing Rights in the Third Party Material Used in the Product
B. Ensuring Rights of Ownership in the Whole
1. Works for Hire
a. Employee Work for Hire
b. Non-Employee Work for Hire
2. Joint Works
3. Acquisition of Rights by Contract

III. Rights of Publicity

IV. Trademark Rights
A. Federal Law
B. State Law

V. Contractual Rights

VI. Looking Forward

VII. Conclusion

List of Cases Cited

I. Introduction

"Multimedia" is the buzzword coined to give new uses of older works and new applications of licensing principles a new name. But "multimedia" in its commonly accepted meaning as a text and animation CD-ROM or floppy disk software product that uses text, graphics and motion pictures is not all that new; the legal principles to consider in acquiring rights to such works are definitely not new. "Multimedia" means "permissions." In order to incorporate the elements used in a typical multimedia work without liability, permissions to use the various types of property incorporated in the work must be obtained. These range from copyright permissions in the text, graphics, films, musical compositions and sound recordings in the work, to trademark clearances for marks appearing in it, rights of publicity and satisfaction of contractual obligations arising from SAG (Screen Actors Guild) contracts with actors appearing in film clips used.

The questions that counsel for a multimedia producer must ask are qualitatively no different than those that counsel for film and television producers, advertisers and calendar and card publishers, for example, have asked for years. The issues are the same, and the questions are the same. They boil down to: did you write this yourself? If not, who did, and did you get permission to use the work?

This paper will first provide an example of a "multimedia" work, and then provide an outline of the issues that need to be considered. Other presentations in the program will provide up-to-date and in-depth discussions of fair use and like considerations that are beyond the scope of this overview presentation.

A. Sample Fact Pattern
HotShotMedia has created a CD-ROM that will feature performances and interviews with famous (and mostly now dead) rock stars, their families and business associates, and clips of film and photographs of them. Cartoon characters that HotShot thinks complement the themes of the stars' music are also intertwined in the product. The user can interact with the program by selecting performers, songs, interviews, films, cartoons or other aspects of the CD-ROM and play them randomly.

HotShot used off-the-shelf videotapes and sound recordings for many of the performances, interviews cartoon graphics and photographs and quotes from books and magazines. HotShot's employees shot some of the interviews, but also contracted with a video production company to film some of them. Both inside and outside producers edited the final film selections used in the product. HotShot's in-house programmers created the code for most of the product, but also hired free-lancers for various aspects.

B. Issues Checklist
1. Copyright Rights -photographs -motion pictures -graphics -textual quotes -music -choreography -computer program in final product
2. Rights of Publicity
-rights in the living and dead performers' personalities
3. Contractual Rights -cartoon characters depictions, logos
4. Contractual Rights -SAG (Screen Actors Guild) -AFTRA (American Federation of Television and Radio Artists) -Writers Guild -Directors Guild -Collective Bargaining Agreements

II. Copyright Rights

A. Clearing Rights in the Third Party Material Used in the Product
Governed by the Copyright Act, 17 U.S.C. Section 101 et seq., copyright protects "original works of authorship fixed in any tangible medium of expression...." Section 102. The categories of protectable works include: 1) literary works; 2) musical works; 3) dramatic works; 4) pantomimes and choreographic works; 5) pictorial, graphic and sculptural works; 6) motion pictures and other audiovisual works; 7) sound recordings; and 8) architectural works.

In the above example, there are copyright rights in the quotes from books and magazines (literary works), rights in the musical compositions performed (music and lyrics), rights in the sound recordings themselves (the specific renditions, as recorded, if created after 1972), rights in any choreography appearing in the films or rock performances, rights in the historical film clips used (motion pictures and other audiovisual works), rights in photographs (pictorial works) and rights in the cartoon graphics (graphic works).

The copyright rights in each of the above must be cleared before lawful use can be made in the multimedia work. Under the above fact pattern, it can be assumed that the copyrights are still in force. Determining whether or not a work is still within or outside of the term of copyright can itself be complicated, depending upon whether the work was created before or after January 1, 1978, whether the copyright had ever been registered or renewed and whether copyright notice was used.

Even if it is clear that copyright subsists, tracking down the copyright holder and obtaining necessary permissions can be a time-consuming and expensive process. No central copyright clearance houses have emerged to assist in the clearance of rights. Similarly, unfortunately, no standards on pricing have emerged that create any predictability as to how much permissions for music, film or photographs are likely to cost. For an excellent list of sources on obtaining permissions, obtain the Multimedia Law and Business Handbook by Diane Brinson and Mark Radcliffe. The only examples of somewhat centralized clearance procedures are in the field of musical compositions and sound recordings. In those cases, BMI, ASCAP, SESAC or the Harry Fox Agency typically will own the rights to sublicense any musical compositions or sound recordings that may be of interest, although in some cases the owner of the rights must be contacted personally.

If you are not starting from the beginning in clearing rights, but already have pre-existing contractual relationships granting licenses to use works, it is important nevertheless to check carefully both the pre-existing rights that were granted as well as the "new" use to determine if sufficient rights have been obtained. This same inquiry should be made even when obtaining rights from a third party. At the least, indemnities should be obtained to protect against liability if a grantor does not own the rights granted.

The issue is to determine if the client has acquired the right to use the copyrighted work in the manner that the client wishes. This is the "old rights, new uses" problem, and, with emerging technology, these are not easy questions to answer. For example, are rights to use a work in "motion pictures" the same as in "television"? In videocassettes? Does the right to use software in a computer program extend to online distribution?
One line of cases, following Bartsch v. Metro-Goldwyn Mayer, Inc., 391 F.2d 150 (2d Cir. 1968) interprets contractual language in light of the technology existing or "reasonably anticipated" at the time. There the Second Circuit held that the licensee of motion picture rights in a play "may properly pursue any uses which may reasonably be said to fall within the medium as described in the license... if the words are broad enough to cover the new use, it seems fairer that the burden of framing and negotiating an exception should fall on the grantor." The licensee had full "exhibition" rights, and the court held that "exhibition" could include broadcasting via television. In Bartsch "motion picture" rights extended to television, since the medium existed and was not expressly exempted from the license. The issues are, one, whether the new use was "reasonably anticipated", and two, was the grant broad enough to encompass the new use? If so, the "old" rights extend to the new medium.

Other courts have taken a different approach, appearing to focus more on the means of distribution and the economics of the transaction to determine if a grant of rights in one medium extends to another. For example, in Rey v. Lafferty, 990 F.2d 1379 (1st Cir. 1993) the court held that a license "to ... episodes [of CURIOUS GEORGE cartoons] ... solely for broadcast on television" did not include rights to market videocassettes of the episodes. The holding is based, in part, on a somewhat dubious factual finding that in 1979, when the contract was concluded, no videocassette market existed, but more on the grounds that the granting clause contemplated broadcasting or centralized distribution, not the playing of videocassettes in the home.
This seems to be the view that the Ninth Circuit is taking. See, e.g., Subafilms Ltd. v. MGM-Pathe Communications Co. 988 F.2d 122 (9th Cir. 1993) vacated in part, 24 F.3d 1088 (9th Cir. 1994). (No rights to perform film YELLOW SUBMARINE in videocassette form where grant of rights was to perform and transmit "by television and by any other technological, mechanical or electronic means, method or device now known or hereafter conceived or created" since home venue videocassettes not anticipated at the time of the license.)

Similar contractual rights issues can arise in the context of rights of publicity, discussed below.

B. Ensuring Rights of Ownership in the Whole
Apart from considering whether the third-party material used in the CD-ROM has been cleared for use, counsel should also consider whether the client owns rights in the finished CD-ROM itself.

It is perhaps obvious to most (even clients) that you can't use bits of film clips or quotes from texts without permission. Less obvious, unfortunately, is the reality that unless employees create a work one hundred percent, there are serious ownership issues in the finished work.

In the above example, HotShot's employees took the film footage of some, but not all, of the interviews used in the product. A third party contractor, a video film production company, filmed some of them, too. As to that footage, the production company, not the client, owns the copyrights in the absence of an assignment, unless that production company's contribution is characterized under uncertain and wistful logic, as a "contribution to a collective work"; or "as part of a motion picture or other audiovisual work". See Section 101(2) and discussion in Section 2, below. Similarly, in the above example not all of the computer code in the final product was written by HotShot's own programmers. Free-lancers also were hired to complete some of the code. This means that those free-lancers, not the client, own that portion of the computer code.

Even though the client may have had the expectation that it owned all the footage in the interviews or all of the computer program code because it paid for it and worked closely with the outside contractors, neither such payment nor collaboration results in copyright ownership.

Section 201(a) of the Copyright Act (17 U.S.C. ss101 et seq.) provides that "copyright in a work ... vests initially in the author or authors of the work. The authors of a joint work are co-owners of copyright in the work."

Section 201(b) provides: "In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written an instrument signed by them, owns all of the rights comprised in the copyright."

Thus the initial author of a work is the owner of the copyright rights. This balance in favor of ownership vesting in the actual author remains in the "work for hire" definition. The only way to have a work considered as a work for hire is to have a written instrument to that effect -- a formality that is frequently overlooked.

1. Works for Hire.
The Copyright Act distinguishes between two very different types of works that may be considered "works for hire". One is for works created by employees in the course and scope of employment, the other, much more limited, is for "specially ordered or commissioned" works by non-employees.

a. Employee Work for Hire
Section 101 provides: "A 'work for hire' is - (1) a work prepared by an employee within the scope of his or her employment". Determination of who is an "employee" was addressed and settled in Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989). The prior, common law "control theory" was rejected (cf. Aldon Accessories Ltd. v. Spiegel, Inc., 738 F.2d 548 (1984). Although not "new", this point must be underscored because many clients (and lawyers) intuitively believe that if a client pays a lot for a work and directs what the work's scope is, then the client then owns it. For example, a publisher who hires a photographer to photograph a series of flowers for a floral calendar may well provide the studio, provide the set, provide the props and have at the ready one or more art directors who tell the photographer exactly how the shot should look when finished, re-direct the shot after initial takes, and so on. That "control", before Reid, was considered by some courts to create a "work for hire". After Reid, no more.

In Reid, the Supreme Court also clarified that common-law agency principles will be applied to determine whether a person is an employee such that rights in copyrightable subject matter created by that person in the course and scope vest, under Section 201, in the employer. Factors include: 1) right to control the manner and means by which the work is created; 2) skill required; 3) source of instrumentalities and tools; 4) location of the work; 5) duration of the relationship between the parties; 6) whether the hiring party has the right to assign additional projects to the hired party; 7) the extent of the hired party's discretion over when and how long to work; 8) the method of payment; 9) hired party's role in hiring and paying assistants; 10) whether work is part of regular business of the hiring party; 11) whether the hiring party is in business; 12) the provision of employee benefits; and 13) the tax treatment of the hiring party. cf. Restatement of Agency s 220(2).

The next question becomes, of course, whether or not the work was created "within the course and scope." Most courts, following Reid, apply common-law agency theory to determine the "course and scope" question. See, e.g., Miller v. CP Chemicals, Inc., 808 F.Supp. 1238 (D.S.C. 1992) (Restatement Agency s228 applied, a three-part test: 1) it is the kind of work which the employee was hired to perform; 2) was it done within substantially within authorized time and space limits; and 3) was the work done to further the interests of the employer?).

Thus if an employee creates a work in the course and scope of employment, the employer owns the copyright, and is in fact considered the "author", and thus "owner" of the work (Section 201).

b. Non-Employee Work for Hire.
The second type of work for hire is defined in Section 101(2) "Work for hire". This Section defines what works created by non-employees can be treated as "works for hire". The Section provides in pertinent part as follows: A 'work for hire' is - (2) a work specially ordered or commissioned for use as: i) a contribution to a collective work, ii) as a part of a motion picture or other audiovisual work, iii) as a translation, iv) as a supplementary work, v) as a compilation, vi) as an instructional text, vii) as a test, viii) as answer material for a test, or ix) as an atlas

Note that the list is short and comprised of a rather odd assortment of types of works that are capable of being treated as non-employee "works for hire". There are only nine categories. They fall, roughly, into three groups: 1) the textbook and other publishers special interest group (contribution to a collective work, translation, supplementary work, compilation, atlas); 2) the motion picture special interest group (part of a motion picture or other audiovisual work); and 3) the secured test special interest group (as a test, answer material for a test).

Applying the above to the example given, the footage of interviews incorporated into the larger "motion picture" comprising the CD-ROM as a whole could be characterized as capable of being a commissioned work for hire because the commissioned work is "part of a motion picture or other audiovisual work", or part of a "collective work". However, software is NOT among the nine enumerated categories of works capable of being treated as works for hire if created by non-employees. Any contract that purports to vest rights in the party commissioning the software or GUI by means of "work for hire" will fail. Thus rights to the software created by outside free-lancers would not be conveyed through "work for hire" provisions.

Even if you have a work within the enumerated nine categories, you still must read on in the statute: "... IF (my emphasis) the parties expressly agreed in a written instrument signed by them that the work shall be considered a work made for hire."

Therefore there must be a signed writing by both parties specifying that the work shall be a work for hire, and the work must be within the nine enumerated categories, to be a "work for hire" under this part of the statute.

It has been thought that such a writing must be completed before the work is completed, and securing a writing before the "work for hire" is created is certainly prudent. However a recent Second Circuit case has held that agreement on the work for hire status before creation of the work is all that is necessary; the actual writing can be executed later. See Playboy Enterprises, Inc. v. Dumas, 53 F.3d 549 (2d Cir. 1995) (endorsements on checks paying for works satisfies the writing requirement). If this trend is followed, the writing requirement will be considerably eased. Note, however, that the writing requirement probably will continue to be strictly enforced. In a related ruling in the above case, the District Court held that signatures of the artist endorsing checks for deposit were sufficient for the "writing" requirement, but that check endorsements by accountants or like business colleagues was insufficient. Playboy Enterprises Inc. v. Dumas 960 F.Supp. 710; 42 USPQ2d 1511 (S.D.N.Y. 1997) (3.25.97).

2. Joint Works
If your client is not the natural author, and ownership cannot vest under the work for hire doctrine, you need to consider whether the client may be a "joint author" and therefore a "joint owner" of the copyright. Section 101 defines a "joint work" as follows: "A 'joint work' is a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole."

"Joint authorship" creates co-ownership status, like a tenant in common. Each author has an undivided interest in the whole of the work. Section 201. The joint contributions must create a "unitary whole" with "inseparable or interdependent parts". The classic example is music and lyrics by the joint authors Rogers & Hammerstein.

There is some difference of opinion, but in the Ninth and other Circuits, the contribution of each joint author must constitute separate, independently copyrightable subject matter for joint authorship status to arise. See, e.g., Ashton-Tate v. Ross, 916 F.2d 516 (9th Cir. 1990) (ideas for commands for user interface not copyrightable subject matter; no joint authorship). This creates a great hurdle to overcome because frequently the entity commissioning the work has not itself created "copyrightable subject matter".
An interesting claim of "joint authorship" in a videogame was recently made by a martial arts expert whose movements were filmed and later digitized to create computer code for arcade games. In Ahn v. Midway Mfg., 965 F.Supp.3d 1134 (N.D. Ill. 1997) (5.28.97) ("Ahn") martial arts experts and a dancer were hired to perform for footage that was digitized and converted into sequences in the Mortal Kombat and Mortal Kombat II videogames. Ahn, a martial arts expert, signed a document making Midway the sole and exclusive owner of the copyrightable expression as a "work for hire" and giving rights to use his name and likeness in connection with the manufacture and use of "coin operated video games". When Midway later wished to release home video and hand-held versions of the game, it asked Ahn for a further release, which he refused. He then sued Midway for copyright and right of publicity infringement when Midway released the home versions of the games.

Somewhat inconsistently, the Court held that Ahn's performance was copyrightable as choreography but that he did not enjoy joint authorship in the computer program resulting from the choreography because he did not participate in the final edit or computerization of his movements. The rights of publicity that he enjoyed in his performance the Court held were subsumed in and pre- empted by the copyright rights. Thus no rights of publicity existed apart from the copyright rights. Finally, the Court dismissed Ahn's contention that he granted rights to Midway only with respect to arcade versions of the game, not home versions. The writing Ahn signed stipulated both that his performance was a "work for hire" and that Midway became the sole and exclusive owner. The Court construed this as an assignment that was good as against all uses of the performance in computer code - whether as source code for an arcade game, or source code for a home version. The computerized code, in both instances, was the same. Because of the inconsistent reasoning, this case should not be relied upon to provide conclusively rights in newer versions of pre-existing works or to disprove "joint authorship".

This case seems to build on another Northern District of Illinois case that similarly had a very forgiving view of "joint works" that also favored the employer or commissioning party, except in the opposite direction - supporting an employer's claim of joint authorship in a work created by an independent third party. In Napoli v. Sears, Roebuck and Co., 874 F.Supp. 206 (N.D. Ill. 1995) ("Sears"), the Court held that rights in the design of a graphic user interface could create joint authorship in the work as a whole, together with the rights in the computer code itself. This decision may or may not be followed, and the copyright status of screen displays is a thin thread, in any event, upon which to hang "joint authorship".

Although both Sears and Ahn offer interesting outcomes with respect to "joint authorship", it has been and will continue to be difficult to prove "joint authorship" and thus "joint ownership" for two reasons. One is the requirement in the Ninth and other Circuits that each contribution be separately copyrightable and the other is the "intent" requirement set forth in the statutory definition.

With respect to the "intent" requirement, the statute expressly requires that for a "joint work" the parties must prepare the work "with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole". In the event of a dispute, it is unlikely that an independent consultant who drafted portions of code would maintain that he or she intended to create a joint work with the client. See Respect Inc. v. Committee on the Status of Women, 815 F.Supp. 1122 (N.D. Ill. 1993), motion granted; 821 F.Supp. 531 (N.D. Ill. 1993).

3. Acquisition of Rights by Contract
The easy, and often the only way to ensure ownership of rights is simply to require an assignment of rights by all employees and independent contractors. This will avoid the "authorship-ownership" issues. Language of assignment of copyright rights must be in all employee and outside contractor contracts. To fulfill the requirements for an assignment under the Act, the assignment must in writing and signed by the party making the assignment.

It is permissible to provide that a commissioned work is both a "work for hire" and also to assign the rights in the same document. This was, in fact, the type of language used in the Ahn writing.

III. Rights of Publicity

Akin to trademark rights, rights of publicity are created by state statutes and also can be protected under the federal common law of unfair competition, 15 U.S.C. Section 43(a), and state common law rights of publicity.

The California statute pertaining to rights of live persons is Section 3344 of the Civil Code which protects the "name, voice, signature, photograph or likeness of another" from use "in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products without consent."

A parallel statute in California protects "dead celebrities" rights. California Civil Code Section 990 creates liability against "[a]ny person who uses a deceased personality's name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services, without prior consent." Complicated provisions provide for who may claim the rights of "deceased personalities", and care should be taken in dealing with purported representatives of such deceased personalities to ensure that the rights claimed are in fact owned by the party claiming to own them.
Interesting questions can arise as to whether a person falls under the category of a "deceased celebrity". If a person does not reach fame in his or her lifetime, but later becomes a cult figure, such person may not qualify. The statute defines a "deceased personality" as "any natural person whose name, voice, signature, photograph, or likeness has commercial value at the time of his or her death whether or not during the lifetime of that natural person the person used his or her name, voice, signature, photograph, or likeness on or in products, etc." The statute creates rights for celebrities who dies within 50 years prior to January 1, 1985. Thus rights of any personality dead before 1935 would not fall under the statutory rights (e.g., Jack London, Anna Pavlova).

A very recent June, 1997 Ninth Circuit case dealt with the extent of publicity rights obtained under a contract. This case presents the Bartsch "old rights, new uses" problem in the context of rights of publicity as opposed to copyright rights. Astaire v. Best Film & Video Corp. __ F. 3d __; 43 USPQ2d 1128 (9th Cir. 1997) involved a suit by Fred Astaire's widow against producers of dance instructional videotapes. During his lifetime, Fred Astaire granted exclusive rights to Ronby to use his name and likeness in connection with dance studios and related activities. A licensee of Ronby produced a series of dance instructional video tapes using the Astaire name and still photographs that Astaire had authorized use of during his lifetime. However, to enhance the product, the producers added clips from two Astaire films that were not part of the original contract at the beginning of the tapes.

Astaire's widow sued claiming that the videotapes were outside the scope of exempted uses under Section 990 and that the use of the film clips amounted to use in a commercial, which was prohibited by Section 990.

The Ninth Circuit interpreted the exemption from liability of Section 990(n), which exempts use of a covered celebrity's rights in a "film...or television program" as applying also to videotapes. The Court held that the use in the dance instructional videotape was as protected a use as a documentary or other film production would be. Furthermore, the Court found that the use of the film clips, although arguably a "commercial" for the instructional tape used to enhance its salability was not a prohibited "advertisement or commercial announcement", since the use was in the protected videotape itself. Thus, the dance instructional tapes were covered by the statute as "films" and using the Astaire film clips to advertise the tapes was not a violation of Section 990 (although using film clips in advertising unrelated to the protected uses would have been). The Court clarified in a series of examples that if a celebrity's rights are protected (use in a film, magazine article, book, etc.), then advertisements for such product could use the celebrity's likeness.

Applying the lessons of Astaire to the hypothetical facts, if the CD-ROM were, like the videotape, characterized as a protected "film", then the use of photographs and footage of the dead rock stars would be exempt under Section 990. Furthermore, advertisements for the CD-ROM could depict photographs of the stars in the CD-ROM. The 9th Circuit expressly refused to require that the film be a documentary to be protected. A purely entertaining film (and hence purely entertaining CD-ROM) is arguably now exempt from the statutory rights of publicity claims.

Besides statutory rights, common law state and federal rights of publicity have been recognized. For example, a "voice alike" which is not within the meaning of "name, voice, signature or photograph" has been protected. Waits v. Frito-Lay, Inc. 978 F.2d 1093; 23 USPQ2d 1721 (9th Cir. 1992); Midler v. Ford Motor Co. 849 F.2d. 460 (9th Cir. 1988) cert. denied 503 U.S. 951 (1992). The most far-reaching common law right of publicity case involved misappropriation of Vanna White's "identity" by use of a robot in a blonde wig and gown turning a game board shaped like a roulette wheel. White v. Samsung Electronics America, Inc. 971 F.2d 1395 (9th Cir. 1992).

Applying the concepts of rights of publicity to the sample facts, it is necessary to obtain rights to use the living performer's likenesses and other publicity rights, in addition to the copyright rights. Until Astaire is tested, it is probably also a good idea to obtain rights to the deceased performer's publicity rights.

Although the Northern District of Illinois in the Ahn case and the Seventh Circuit in Baltimore Orioles Inc. v. Major League Baseball Players Ass'n, 805 F.2d 663 (7th Cir. 1986) have held that the rights of publicity of performers is pre-empted if performers grant copyright rights to the filming of their performances, it cannot be assumed that because copyright rights have been obtained that rights of publicity likewise have been cleared. Indeed frequently the opposite is the case.

Motion picture studios usually hold the copyright rights in their films, but may often not hold the rights of publicity owned by the performers in the films that would allow use of the still or moving images of performers in any work other than the motion picture and associated publicity for the film.

IV. Trademark Rights

Trademarks and service marks are those words, symbols, phrases or designs which the public associates with a single source of goods or services. Trademarks and service marks are essentially identical, except that trademarks designate a single source of goods, while service marks designate a single source of services. A mark may simultaneously function and be protected as both a service mark and a trademark. For example, a mark which is used in connection with products which the trademark owner also repairs or services may be both a trademark and a service mark.

A. Federal Law
The Lanham Trademark Act of 1946, found at 15 U.S.C. Sections 1051 et seq. is the federal statute governing trademark rights. Section 45 of the Lanham Act defines a trademark as "any word, name, symbol, or device or any combination thereof - (1) used by a person, or (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this Act, to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown." Section 45 similarly defines a service mark as "any word, name, symbol, or device ... [used] ... to identify and distinguish the services of one person ..."

In the United States, the establishment of ownership rights in trademarks and service marks requires either: 1) filing of intent to use applications to register with the United States Patent and Trademark Office, or 2) the actual use of the mark in commerce. In all cases, as the public association with a mark and the source of goods on which it appears becomes stronger, the rights of the owner of that mark become stronger, more valuable, and more easily enforceable.

It is not necessary to register a mark federally in order to enjoy the protection of the Lanham Act. Section 43(a), the federal unfair competition statute, allows for enforcement of unregistered marks, as well as protects against related types of unfair competition.

B. State Law
The source of Congressional power to regulate trademark rights at the federal level stems from the Commerce Clause, not Article 1, Section 8, which creates exclusive federal rights under the patent and copyright laws. Therefore the Lanham Act, for the most part, does not preempt state laws regulating trademarks. Accordingly, there is a parallel regime of state law for protection of trademarks.

State trademark statutes provide trademark and service mark protection within each state. State statutes closely parallel the Lanham Act. To illustrate, California's trademark statute defines a trademark in terms nearly identical to those in the Lanham Act as "any word, name, symbol, or device or any combination thereof adopted and used by a person to identify goods made or sold by him and to distinguish them from goods made or sold by others." Cal. Bus. & Prof. Code Section 14207.

In the above sample fact pattern, the cartoon characters selected for the product are probably protected by trademark as well as copyright rights. Individual cartoon characters such as MICKEY MOUSE and the ROADRUNNER all have been the subject of trademark infringement actions. See, e.g. Roadrunner Computer Systems, Inc. v. Network Solutions, Inc. (Civ. No. 96-413-A E.D. Va., filed March 26, 1996).
Even trademarks worn by performers or appearing on goods in a film can be protected apart from other trademark copyright or other rights for which permissions have been obtained. For example, in National Football League Properties Inc. v. Playoff Corp. 808 F.Supp. 1288; 25 USPQ2d 1788 (N.D. Texas 1992), publishers of trading cards obtained the rights from the Players Association to use the likenesses of various football players in the course of play. However, the card company did not obtain the rights from the licensing entity for the NFL to use NFL logos. The court held that it was a violation of the rights in the NFL trademarks for cards to be sold that depicted the marks on the players' uniforms in the course of play, even though the marks were not accentuated or featured in a way that they were used as the main vehicle to sell the cards.

The practice in the motion picture and television industries has long been to clear rights in all trademarked products appearing (indeed "placement" of products is paid for by product manufacturers). Similarly in the card and calendar business, the best practice is either to obliterate trademarks or obtain rights to use the products.

As stated in the Introduction, each of these types of rights - copyright, rights of publicity and trademark rights are subject to "fair use", some of which is statutory and some of which is common-law based. In any given case depiction of a personality, a trademark or use of copyrighted material could be protected under principles of fair use and the First Amendment. The point, for purposes of this brief overview, is simply to point out the issue and the need, in general, to clear such rights.

V. Contractual Rights

Where any use of filmed material or recorded music is concerned, the question should always be raised whether any contractual obligations with unions or otherwise are involved that will require either consents or permissions to re- use material.

Motion pictures can involve rights by the original screen writer, if rights were retained (Writers Guild), possible contractual rights held by the director (Directors Guild), rights in the performers - actors or musicians - appearing in the work (Screen Actors Guild or American Federation). Collective bargaining agreements can cover all sorts of technical personnel that contribute to the creation of a film or sound recording.

VI. Looking Forward

While clearing rights for the CD-ROM that is in the sample facts, and ensuring that all rights in the finished work are owned by the client, don't forget to obtain rights that are broad enough for all potential purposes.

The immediate need may be to secure rights in the CD-ROM. However, it should be anticipated that the "hard" product will be delivered on-line or embodied in some other medium. Therefore ensure, if possible, that rights not only for use in the particular CD-ROM are obtained, but also rights in other media, spin-offs and other forms of delivery.

VII. Conclusion

Regrettably, the "multi-media" industry has not evolved set procedures or pricing structures to obtain all rights that may be implicated in a single interactive CD-ROM product. It is laborious and time-consuming to clear all the individual rights. The best solution is always to create all the content up- front. The next best solution may be to partner with existing rights holders such as licensing agencies, motion picture studios and like entities that would tend to have already the full scope of rights needed for the project, or the bargaining clout to get the rights. Finally, another practical solution is to use images and other works from stock photo houses, clip-art products and like sources that are able to license uses for multi-media purposes.

List of Cases Cited

Ahn v. Midway Mfg., 965 F.Supp. 1134 (N.D. Ill. 1997) (5.28.97)
Aldon Accessories Ltd. v. Spiegel, Inc., 738 F.2d 548 (1984)
Ashton-Tate v. Ross, 916 F.2d 516 (9th Cir. 1990)
Astaire v. Best Film & Video Corp. __ F. 3d __; 43 USPQ2d 1128 (9th Cir. 1997) (6.20.97)
Baltimore Orioles Inc. v. Major League Baseball Players Ass'n, 805 F.2d 663 (7th Cir. 1986)
Bartsch v. Metro-Goldwyn Mayer, Inc., 391 F.2d 150 (2d Cir. 1968)
Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989)
Midler v. Ford Motor Co. 849 F.2d. 460 (9th Cir. 1988) cert. denied 503 U.S. 951 (1992)
Miller v. CP Chemicals, Inc., 808 F.Supp. 1238 (D.S.C. 1992)
Napoli v. Sears, Roebuck and Co., 874 F.Supp. 206 (N.D. Ill. 1995)
National Football League Properties Inc. v. Playoff Corp. 808 F.Supp 1288; 25 USPQ2d 1788 (N.D. Texas 1992)
Playboy Enterprises, Inc. v. Dumas, 53 F.3d 549 (2d Cir. 1995)
Playboy Enterprises Inc. v. Dumas 960 F.Supp.710; 42 USPQ2d 1511 (S.D.N.Y. 1997) (3.25.97)
Respect Inc. v. Committee on the Status of Women, 815 F.Supp. 1122 (N.D. Ill. 1993), motion granted; 821 F.Supp. 531 (N.D. Ill. 1993).
Rey v. Lafferty, 990 F.2d 1379 (1st Cir. 1993)
Roadrunner Computer Systems, Inc. v. Network Solutions, Inc. (Civ. No. 96- 413-A E.D. Va., filed March 26, 1996).
Subafilms Ltd. v. MGM-Pathe Communications Co. 988 F.2d 122 (9th Cir. 1993) vacated in part, 24 F.3d 1088 (9th Cir. 1994).
Waits v. Frito-Lay, Inc. 978 F.2d 1093; 23 USPQ2d 1721 (9th Cir. 1992)
White v. Samsung Electronics America, Inc. 971 F.2d 1395 (9th Cir. 1992)