A Legal Guide to Web & Software Development
Easy to use!
Stephen Fishman, J.D.
October 2007, 5th Edition
Protect your rights, and your hard work!
The laws covering website and software development are complex and confusing, but if you don't untangle them, it could cost you thousands of dollars in attorneys' fees and lawsuits.
Fortunately, Legal Guide to Web & Software Development decodes this complex area of the law, thoroughly and in reader-friendly English. It also provides contracts, agreements and legal forms with step-by-step instructions for filling them out, so you can protect your software and website without paying a lawyer's ransom.
Use Legal Guide to Web & Software Development to learn:
- what kind of legal protection you need
- the strengths and limitations of each type of protection
- how to avoid infringement
- which provisions you need when drafting an agreement
- how to obtain permission to use other people's materials
You'll find complete, step-by-step instructions to draft:
- employment agreements
- contractor and consultant agreements
- development agreements
- license agreements
The 5th edition of Legal Guide to Web & Software Development is completely updated to provide the latest case law and statutory revisions.
“An amazing book! A must for anyone in the software business…Answers nearly every legal question you can imagine and some you would have never thought of. Highest recommendation!”
-John Dvorak, PC Magazine
“This book passes my own personal test for legal guides—that it be easily readable by people who detest lawyers—and passes it with higher marks than any other legal guide I’ve come across."
- Jeff Duntemann, Editor, PC Techniques Magazine
“Here is a timely education into the basic legal issues that should be understood by every programmer, designer, and manager. At last, in one book, you can read all about …intellectual property, employment, and contracts.”-EDS Research
The following forms are in rich text format (RTF)
Forms for Hiring and Firing Employees and Independent Contractors
- Employment Agreement - Nontechnical Employees
- Employment Agreement - Technical Employees
- Independent Contractor Agreement (Favoring Hiring Firm)
- Independent Contractor Agreement (Favoring Contractor)
Agreements for a Specific Project
- Custom Software Development Agreement
- Web Development Agreement
Forms for Protecting Trade Secrets
- Basic Nondisclosure Agreement
- Nondisclosure Agreement for Licensee
- Nondisclosure Agreement for Beta Tester
- Nondisclosure Agreement for Visitor
- Nondisclosure Agreement for Interview
- Acknowledgment of Obligations (of departing employee not to disclose trade secrets)
- Letter to New Employer (informing new employer of ex-employee's obligation not to disclose trade secrets)
Forms for Selling or Granting Permission to Use Creative Works
- Copyright Assignment
- Multimedia License Agreement for Software
- Shrink-Wrap End User License Agreement (Software)
- Click-Wrap End User License Agreement
- License Agreement
- License Agreement for Web Content
- Linking Agreement
- Multimedia Publicity/Privacy Release (for using someone's name, photo, voice or performance in your creative work or promotional materials)
The following forms are in Adobe Acrobat PDF format (asterisks indicate forms with fill-in fields)
Copyright Registration Forms
- Copyright Office Document Cover
- Form TX* (for all types of writing and programming code)
- Short Form TX*
- Form PA* (for audiovisual works)
- Short Form PA*
- Form VA* (for primarily pictoral or graphic works)
- Short Form VA*
- Form ___ /CON* (continuation sheet for all forms)
- Form CA* (supplemental registration - for corrections)
Stephen Fishman is the author of many Nolo books, including Deduct It! Lower Your Small Business Taxes, Every Landlord's Tax Deduction Guide, Tax Deductions for Professionals, and Home Business Tax Deductions: Keep What You Earn--plus many other legal and business books. He received his law degree from the University of Southern California in 1979. After time in government and private practice, he became a full-time legal writer in 1983.
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1. Creating Agreements
- The Process of Reaching a Final Agreement
- Print Out and Proofread the Final Agreement
- Attach All Exhibits
- Sign the Agreement
- Faxing and Emailing Agreements
- Save the Agreement
2. Introduction to Intellectual Property
- What Is Intellectual Property?
- Trade Secret Law
- Copyright Law
- Patent Law
- Trademark Law
- Implementing an Intellectual Property Plan
3. Copyright Basics
- What Is a Copyright?
- What Does Copyright Protect?
- Three Prerequisites for Copyright Protection
- Limitations on Copyright Protection
- Copyright Infringement
- Copyright Formalities
- Masks Used to Manufacture Computer Chips
4. Copyright Registration
- Copyright Registration: The Basics
- Selecting the Proper Application
- Filling Out the Application
- Complying With Copyright Deposit Requirements
- Software Deposits
- Website Deposits
- Sending Your Application to the Copyright Office
- Expedited Registration
- Preregistration of Unpublished Software
- Dealing With the Copyright Office
- Corrections and Changes After Registration Is Completed (Supplemental Registration)
5. Copyright Notice
- Why Use a Copyright Notice?
- When to Place a Copyright Notice on Software and Websites
- Form of Notice
- Notice on Compilations and Derivative Works
- Where to Place Copyright Notice
- Other Information Near Notice
6. Software and Web Copyright Infringement
Part I. Avoiding Copyright Infringement
- Things You Should Never Do
- Things You May Be Able to Do
- Protecting Against Infringement Claims
- What to Do If You're Accused of Copyright Infringement
Part II. Suing Others for Copyright Infringement
- How to Know Whether You Have a Valid Infringement Claim
- Self-Help Remedies for Copyright Infringement
- Nuts and Bolts of Infringement Lawsuits
- What You Can Get If You Win: Remedies for Copyright Infringement
7. Trade Secret Basics
- What Is a Trade Secret?
- Trade Secret Owner's Rights
- Limitations on Trade Secret Protection
- Enforcement of Trade Secrets
- Avoiding Trade Secret Misappropriation Claims
- Using Trade Secrets With Other IP Protections
8. Establishing a Trade Secret Protection Program
Part I. Identifying and Protecting Your Trade Secrets
- Identifying Your Trade Secrets
- Basic Trade Secret Protection Program
- Advanced Trade Secret Protection Program
Part II. Drafting Nondisclosure Agreements
- General Nondisclosure Agreement
- Prospective Licensee Nondisclosure Agreement for Software Company
- Software Beta Tester Nondisclosure Agreement
- Visitor Nondisclosure Agreement
- Interview Nondisclosure Agreement
9. Software and Internet Patents
- Patent Basics
- Patents for Software
- Internet Business Method Patents
- Should You Apply for a Software or Internet Patent?
- Avoiding Patent Violations (Infringement)
10. Trademarks and Domain Names
- What Are Trademarks and Service Marks?
- Trademark Ownership
- Selecting a Trademark
- Federal Trademark Registration
- Trademark Notice
- Trademark Searches
- Enforcing Trademark Rights
- Trade Dress Protection
- Internet Domain Names
11. Software and Website Ownership
- Copyright Ownership
- Trade Secret and Patent Ownership
- Transferring Software and Website Ownership and Use Rights
12. Electronic Databases
- Types of Databases
- Copyright Protection for Electronic Databases
- Registering Contents of Electronic Databases
- Using Noncopyright Means to Protect Databases
13. Website and Software Permissions
- When You Need to Obtain Permission
- Works That Are in the Public Domain
- The "Fair Use" Exception to Copyrighted Works
- Obtaining Permission to Use Copyrighted Materials
- Privacy and Publicity Problems
14. Employment Agreements
Part I. Employer's Guide to Drafting Employment Agreements
- Why Use Employment Agreements?
- Who Should Sign?
- When New Employees Should Sign
- Agreements With Current Employees
- Selecting Employment Agreements You Need
- Employment Agreement for Nontechnical Employees
- Employment Agreement for Technical Employees
Part II. Employment Agreements From the Employee's Viewpoint
- Confidentiality of Trade Secrets
- Intellectual Property Ownership
- Postemployment Restrictions on Competition
15. Consulting Agreements
Part I. Hiring Independent Contractors
- Benefits and Drawbacks of Using Independent Contractors
- Which Workers Qualify as Independent Contractors
- Independent Contractor Agreement Favorable to Hiring Firm
Part II. Working as an Independent Contractor
- Benefits and Drawbacks of Working as an Independent Contractor
- Consulting Agreement Favorable to an Independent Contractor
16. Software and Website Licenses
- What Is a License?
- Why Use Licenses to Sell Software?
- Types of Software Licenses
- Licenses for Mass-Marketed Software
- Negotiated License Agreements
- Open Source Licenses
- Website Content License
- Website Linking Agreement
17. Website Development Agreement
- Identifying the Parties to the Agreement
- Contents of Website Development Agreements
18. Custom Software Development Agreement
- Contents of Custom Software Development Agreements
How to Use the CD-ROM
- Installing the Form Files Onto Your Computer
- Using the Word Processing Files to Create Documents
- Using U.S. Copyright Office Forms
- List of Forms Included on the CD-ROM
Website and Software Permissions
When You Need to Obtain Permission.......................................................................... 275
New Material Created for a Web or Software Project......................................... 275
Preexisting Materials................................................................................................ 276
Using Copyrighted Material Without Permission............................................... 276
Works That Are in the Public Domain.......................................................................... 277
Things That Are Never Protected by Copyright................................................... 277
Works Whose Copyright Has Expired................................................................... 278
Works Dedicated to the Public Domain................................................................ 278
Public Domain Works Are Not Always Freely Available.................................. 278
The “Fair Use” Exception to Copyrighted Works........................................................ 279
Obtaining Permission to Use Copyrighted Materials................................................. 280
Written Materials (Text).......................................................................................... 281
Film and Video........................................................................................................... 282
Drawings and Other Artwork.................................................................................. 282
Privacy and Publicity Problems..................................................................................... 286
Right to Privacy.......................................................................................................... 286
Right of Publicity....................................................................................................... 287
First Amendment Limitations on Privacy/Publicity Rights............................. 288
Releases of Privacy/Publicity Claims................................................................... 288
This chapter covers the permissions problems that arise when ever a Web or software developer seeks to add content to a project.
Most websites and software programs combine a variety of materials, including text, graphics, photos, videos, and sounds. Unfortunately, such projects can present difficult and expensive legal problems. These fall into two main categories:
• Copyright permissions problems: You may need to obtain permission to use materials protected by copyright, whether it be text, photos, video and film clips, software, or music. Obtaining permissions for a Web or software project can involve tracking down many different copyright owners and negotiating licenses to use their material.
• Publicity/privacy problems: Use of photos, film or video footage, or audio recordings can constitute a breach of the privacy or publicity rights of the people whose likenesses are used. You’ll need to consider whether you must obtain privacy releases from persons whose images or voices are used.
Obtaining copyright permission and publicity/privacy releases can be a weighty task.
EXAMPLE: The University of the Midwest History Department decides to create a comprehensive website about Columbus’s “discovery” of America. Midwest wants to incorporate into the website a variety of preexisting materials about Columbus, including:
• text from various articles and books;
• photos from books, magazines, and other sources;
• video clips from several television programs;
• film clips from two theatrical movies about Columbus;
• music to be used as background to the images and text; and
• excerpts from a Broadway musical and Italian opera based on Columbus’s life.
Midwest also plans to create an abbreviated version of the website on a CD-ROM for high school students.
All in all, Midwest intends to incorporate hundreds of separate items into its website and CD-ROM. This sounds like a fine idea for a website and CD-ROM. However, Midwest needs to address and resolve the copyright permissions problem and publicity/privacy problems before it can place its website online.
Other Intellectual Property Concerns
A Web or software developer’s main concerns are with copyright and publicity/privacy problems. However, other intellectual property laws may come into play as well. For example:
• Third-party software may be patented, as may certain business methods used on the Web. A license must be obtained to use any material protected by a patent.
• The federal and state trademark laws may protect character names, physical appearance, and costumes; some titles; as well as product names, logos, slogans, and packaging. A developer may have to obtain permission to use a trademark on a website. (See Chapter 10 for an overview of trademarks.)
• Finally, trade secret problems may occur whenever a developer uses or is exposed to any material or information (even a mere idea) that is covered by a confidentiality agreement. A developer must be particularly vigilant about avoiding use of confidential information any employee obtained from a prior employer. (See Chapter 7 for a detailed discussion of trade secrets.)
There are ways to get around, or at least alleviate, permissions problems. First we’ll discuss when a Web or software developer does and does not need to obtain permissions, and second, where and how to get them if they are needed. We’ll then review the privacy and publicity issues that arise in Web and software projects.
When You Need to Obtain Permission
Whether or not a Web or software developer needs permission to include any given item in a project depends on:
• whether the item is protected by copyright or is in the public domain;
• whether or not the material is created especially for the project;
• who created it (employee, independent contractor, or third party); and
• the extent and nature of the intended use.
New Material Created for a Web or Software Project
No copyright permissions problems are normally presented when material is created especially for a Web or software project, whether by the developer’s employees or independent contractors.
Under the copyright laws, a developer will automatically own the copyright in materials created in-house by its own employees. As a result, the developer need not obtain permission from its employees to use copyrighted works—the developer already owns those rights. For example, Midwest University would not need to obtain permission to use text or graphics created by an employee for its website on Columbus. It is wise, however, to have creative employees sign employment agreements transferring whatever ownership rights they might conceivably have to the developer. (See Chapter 14 for a detailed discussion and sample forms.)
When a developer hires an independent contractor to contribute to a Web or software project, it should require the contractor to assign copyright rights to the developer. For example, if Midwest hires a freelance artist to create drawings for its Columbus project, it should have the artist, before commencing work, sign an independent contractor agreement assigning her rights in the drawings to Midwest. (See Chapter 15 for a detailed discussion and sample forms.)
The permissions problem raises its ugly head when a developer wishes to use preexisting materials—that is, materials previously created by nonemployees (or created by employees before they became employees). You can figure out whether permission is required by answering the following two questions:
• Is the material in the public domain?
• Does your intended use of the material constitute a “fair use?”
If your answer to both questions is “no,” you need permission; otherwise you don’t.
Using Copyrighted Material Without Permission
You might be tempted to use copyrighted material without permission if you are unable to locate the copyright owner or simply don’t have the time, money, or staff to obtain numerous permissions. If the copyright owner later discovers what you’ve done, at the very least you will be liable for the reasonable value of the use. If the material is not terribly valuable, this won’t amount to much, and the owner will probably accept a small permission fee.
EXAMPLE: Midwest University wants to quote two pages from an old magazine article about Columbus. The magazine is out of business and neither the author nor her heirs can be located. Midwest University decides to use the quotation anyway. One year later, Midwest University is contacted by the article’s copyright owner. The owner agrees to accept $250 from Midwest for retroactive permission to use the quotation.
On the other hand, if the material is valuable, you could find yourself in big trouble. At the very least, you’ll be liable for a substantial permission fee, perhaps more than you’d be able or willing to pay. Instead of settling for a permission fee, the copyright owner might sue you for copyright infringement. In this event, you could face substantial damages. The copyright owner you’ve stolen from could ask the court for the reasonable value of the use and the amount of any economic loss caused by your theft; or, if the material has been registered with the U.S. Copyright Office, the copyright owner could ask for special statutory damages, which can range up to $150,000 (it’s up to the judge or jury to decide how much). In some cases, you could even be subject to criminal prosecution. And don’t forget, you’ll be paying your attorney handsomely, regardless of how the case turns out.
EXAMPLE: Midwest University “borrows” several minutes from the video version of a recent theatrical movie about Columbus and uses it on its website. The film’s copyright owners discover the theft and sue Midwest for copyright infringement. They obtain an injunction prohibiting Midwest University from using the pirated footage and ultimately obtain a court judgment against Midwest. They ask the judge to award statutory damages, and, because the judge finds that the infringement was willful and blatant, she awards $50,000 in damages against Midwest.
Works That Are in the Public Domain
The general nature of copyright protection is discussed in Chapter 3. If you haven’t read that material, do so now. Copyright protects all original works of authorship. This includes, but is not limited to, writings of all kinds, music, sound recordings, paintings, sculptures and other works of art, photographs, software, film, and video.
Luckily for Web and software developers, however, not every work of authorship ever created is currently protected by copyright—not by a long shot. A work that is not protected by copyright is said to be in the “public domain”; in effect, it belongs to everybody. Anyone is free to use it without asking permission, but no one can ever own the work again. By using public domain materials, a developer can avoid going through the time, trouble, and expense involved in getting permission to use copyrighted materials.
Following is a brief description of the types of materials that are in the public domain. However, to determine whether a particular work is in the public domain, refer to The Public Domain: How to Find & Use Copyright-Free Writings, Music, Art & More, by Stephen Fishman (Nolo).
Things That Are Never Protected by Copyright
Certain works of authorship and other items are never protected by copyright and are therefore always in the public domain. These include:
• Ideas and facts: Because copyright only protects an author’s expression, ideas and facts themselves are not protected.
• Words, names, titles, slogans, and other short phrases: Individual words are always in the public domain, even if they are invented by a particular person. However, these items may be protected under state and federal trademark laws if they are used to identify a product or service. (See Chapter 10.)
• United States government works: All works created by U.S. government employees as part of their jobs are in the public domain. This includes, for example, everything printed by the U.S. Printing Office, NASA photographs, the president’s speeches and publications, and other works by federal agencies. But this rule does not apply to works by state and local government employees; those works may be protected by copyright.
Works Whose Copyright Has Expired
Another large category of public domain works are those whose copyright has expired. As of 2007, every work published in the United States before 1923 is in the public domain in the U.S. Many works initially published in the U.S. during 1923-1963 are also in the public domain because their copyrights were never renewed.
Works Dedicated to the Public Domain
The owners of some works have decided they don’t want them to be protected by copyright and dedicate them to the public domain. For example, some software has been dedicated to the public domain. There are no formal procedures for dedicating a work to the public domain. The author just has to indicate on the work that no copyright is claimed.
Public Domain Works Are Not Always Freely Available
The fact that a work is in the public domain does not necessarily mean that it is freely available for use by a developer. Although the copyright in a work may have expired, the work itself may still be owned by someone, who may restrict or charge for access to it.
This is usually not a problem for written works, which can be found in bookstores and libraries, but it is a problem for other types of works. For example, all works of art published in the United States before 1923 are in the public domain, but recent photographs of them may not be. Museums and individual collectors usually control access to valuable works of art that are in the public domain and often own all available photographs of such works. Getting permission to use such photographs or to take new ones can be difficult and expensive.
Fees may also have to be paid to obtain access to and make use of public domain photographs, film, and music from collectors, private archives, and other sources.
The “Fair Use” Exception to Copyrighted Works
Even if the material you want to use is protected by copyright, you will not need permission if your intended use constitutes a “fair use.” Under the fair use rule, an author is permitted to make limited use of preexisting protected works without asking permission. All copyright owners are deemed to give their automatic consent to the fair use of their work by others. The fair use rule is an important exception to a copyright owner’s exclusive rights.
The fair use rule is designed to aid the advancement of knowledge, which is the reason for having a copyright law in the first place. If scholars, educators, and others were required to obtain permission every time they quoted or otherwise used brief portions of other authors’ works, the progress of knowledge would be greatly impeded.
Determining whether the fair use privilege applies in any given situation is not an exact scientific process. Rather, it requires a delicate balancing of all the factors discussed below. Probably the best rule for fair use is the following variant of the Golden Rule: “Take not from others to such an extent and in such a manner that you would be resentful if they so took from you” (McDonald, “Non-infringing Uses,” 9 Bull. Copyright Society 466 (1962)).
The following four factors must be considered to determine whether an intended use of an item constitutes a fair use:
• the purpose and character of the use;
• the nature of the copyrighted work;
• the effect of the use upon the potential market for or value of the copyrighted work; and
• the amount and substantiality of the portion used in relation to the copyrighted work as a whole (17 U.S.C. § 107).
Not all these factors are equally important in every case, but all are considered by the courts in deciding whether a use is “fair.” You should consider them all in making your own fair use analysis. For a more detailed discussion of fair use principles and the fair use factors, see Chapter 6.
If you’re not sure whether an intended use is a fair use, seek legal advice or get permission.
Giving Credit Does Not Make a Use “Fair”
Some people have the mistaken idea that they can use any amount of material so long as they give the creator or copyright owner credit. This is simply not true. Providing credit will not in and of itself make a use “fair.” Nevertheless, attribution should always be provided for any material obtained or copied from third parties. Passing yourself off as the creator of other people’s work is a good way to get sued for copyright infringement, and is likely to make a judge or jury angry if you are sued. Quoting with attribution is a very good hedge against getting sued, or losing big if you are sued. Thus, you should always provide a credit line for any material you make fair use of.
Obtaining Permission to Use Copyrighted Materials
If you want to use material that is not in the public domain and your use doesn’t qualify as a fair use, you need to get permission. With the notable exception of the music industry, which has had a system of rights collectives in place for many decades, obtaining permission to use copyrighted materials in a website or software project can be a difficult, time-consuming, and often chaotic process.
Obtaining permissions can be especially hard because, for a variety of reasons, many copyright owners are reluctant to grant any website or software permissions. Many owners are reluctant to permit their work to be reduced to digitized form for fear they will lose control over unauthorized copying. Still others intend to launch their own website or software ventures and don’t want to help potential competitors. Some owners will grant permission, but only for exorbitant amounts of money (there are generally no standard rates for such permissions).
Securing a website or software permission, then, can require a good deal of persistence, salesmanship, and creative negotiating on a developer’s part.
For a detailed explanation of how to go about getting permission and all the forms you may need, refer to Getting Permission: How to License & Clear Copyrighted Materials Online & Off, by Richard Stim (Nolo).
Expect permissions to take anywhere from one to three months to negotiate and obtain. The first step is to learn how much a particular work would cost to use. Depending on your budget for obtaining permissions, the cost might make your decision for you, if it is beyond your means. Often copyright owners have a sliding scale of fees for different uses. Commercial uses are usually more costly than nonprofit uses.
It is best to obtain written permission before you begin using the copyrighted work. But you should absolutely obtain it before your project is completed. It is sometimes more difficult and more expensive to obtain permission after a website or software program is completed. If the copyright owner becomes aware that you have a vested interest in obtaining permission (for example, your website is already online), the price may rise. In addition, if you can’t obtain permission, you’ll have to re-do the work, which can be expensive and time-consuming. The best policy is to start seeking all required permissions as soon as possible.
If you need to obtain many permissions, or simply don’t want to bother getting them yourself, there are private companies and individuals who obtain permissions on an author or publisher’s behalf. These permission specialists may have contacts with some publishers that enable them to get better and faster results than you can yourself. Clearance firms usually charge by the hour.
A comprehensive list of clearance firms can be found in the Literary Market Place (LMP), a directory for the publishing business, under “Permissions.” The LMP can be accessed online at www.literarymarket place
Written Materials (Text)
Obtaining permission to use any type of copyrighted written materials—excerpts from books, magazines, journals, and so forth—can be merely difficult or simply impossible. There is no single, centralized group or organization granting such permissions and there are no standard fees. You—or someone you hire—must track down the copyright owner of the material you want to use, or her representative (usually publisher or agent), and cut your own deal.
If you need photographs, several sources are available:
• you can use commercially available clipmedia—materials that are typically published on websites or CD-ROM disks specifically for users to incorporate into websites, software, and other works. (Review the license agreement that comes with the clipmedia to make sure you can publicly distribute the material for commercial purposes);
• you can try to get the rights to use photos that have appeared in magazines, books, and other publications;
• you can directly contact photographers and try to get permission to use their work; or
• you can deal with stock photo agencies—companies that acquire the rights to photos and license them over and over again to magazines, advertising agencies, book publishers, and others.
Film and Video
A variety of film and video footage is available from stock houses—companies that acquire the right to license films and videos. A good place to begin a footage search is Footage.net (www.footage.net).
With modern digital technology, it is very easy for website and software developers to take a photo or film or video footage and alter it to such an extent that it is no longer recognizable by its original creator. Is this copyright infringement? If the end result is not recognizable as coming from the original, it may not be. In the words of one court, “copying ... so disguised as to be unrecognizable is not copying” (See v. Durang, 711 F.2d 141 (9th Cir. 1983)). However, before the final result is reached, it may be necessary to create intermediate copies of the original work that are clearly recognizable. It is unclear whether this would constitute copyright infringement. The conservative approach is to obtain permission before using any copyrighted photo or footage.
Drawings and Other Artwork
Permission to use and reproduce drawings, paintings, and other works of art must be obtained from the owner, or sometimes the artist. Artists sometimes retain the reproduction rights to a particular piece while selling the piece itself and the right to display it. The person or entity controlling the reproduction rights must be tracked down—whether a museum, individual collector, artist, or artist’s estate. Fees and terms for such rights vary widely.
The rights to cartoons are usually handled by distribution syndicates or agents. A flat fee is customarily charged for a limited- time use. You should be able to find out whom to contact for permission by calling the publication in which the cartoon appeared.
Although the music industry has in place a standardized process for obtaining permissions, the procedures and expenses can be formidable. Keep in mind that there are two distinct copyrights associated with recorded music: one for the musical composition and the other for the recording.
This means that to make a new recording of a song for inclusion in a website or computer program, a developer must obtain permission from the music publisher. But to use an existing recording, permission must be obtained from the music publisher and the recording company.
Making new recordings of existing music for software
The music industry has developed a process for obtaining permission to make a new recording of existing copyrighted music and reproducing it in a multimedia program. The Harry Fox Agency—a subsidiary of the National Music Publishers’ Association—issues licenses and collects and distributes royalties on behalf of music publishers who have entered into agreements with Fox for this service. The agency can be contacted at www.harry fox.com.
The Harry Fox Agency handles what are known as mechanical and synchronization licenses—licenses to record a song or other musical composition and use it in conjunction with still or moving images. This is sufficient for personal use of a multimedia program.
Using existing recordings for software
Obtaining permission to use an existing recording can be more difficult and expensive than making a new one. First, it is necessary to obtain the mechanical and synchronization rights to the music itself through the Harry Fox Agency, as outlined above. If the multimedia product is to be performed in public, a performance license must also be obtained through one of the appropriate performing rights societies, listed below:
• ASCAP (American Society of Composers, Authors & Publishers) (www.ascap.com);
• BMI (Broadcast Music, Inc.) (www .bmi.com);
• SESAC (Society of European State Authors and Composers) (www.sesac .com).
Permission must also be obtained to use the recording itself (termed “master recording rights”) from the owner of the copyright in the recording.
The “special markets division” of the appropriate recording company must be contacted to obtain master recording rights. The recording contract must be examined to see who has the right to grant permission to reuse the recording. This may be the record company or the artist. Recording companies are generally reluctant to permit their recordings to be reused, particularly if a well-known song is performed by a well-known artist. Where obtainable, permission to do so is usually very expensive. Musician union agreements may also require that reuse fees be paid to the musicians, vocalists, and others who worked on the recording.
With modern digital audio technology, anyone with access to a digital synthesizer can capture all or part of a previous recording and reuse bits and pieces in new recordings. The unauthorized sampling of even a few seconds of a sound recording has been held to constitute copyright infringement of both the sound recording from which the sample is taken and the underlying song. Particularly if the recording is well known, there is a real risk of being sued for illegal copying and having to pay substantial damages. This risk is reduced if the sampled sounds are so altered that their original source is not recognizable. But if the source of sampled music is recognizable, permission for the use should be obtained as outlined in this section. A good general rule is, “If you can name the tune, get permission.”
Webcasting and audio streaming rights
There are two common ways to transmit music over the Internet: downloading and streaming. Audio streaming (and webcasting) is a process by which digital music is broadcast over the Internet, much like a radio station broadcasts music. The computer user hears the music simultaneously as it is being played by the website. Both webcasting and audio streaming are referred to as “digital audio transmissions.”
• If you created the music and the recording, no permission is needed for digital audio transmissions.
• If you are using someone else’s song but you have recorded your own version, you will need both performance and mechanical rights permissions from the music publisher.
• If you are streaming a song that is owned by a music publisher and a record company, you will need permission from both entities.
EXAMPLE: Larry develops a website for a perfume company. He wants to stream a recording of “Addicted to Love” by Robert Palmer. He will need permission from the publisher of the song and from the record company that owns the Robert Palmer classic in order to permit downloading of that version.
Below we discuss each type of permission.
Music publisher permission for streaming website use
Before offering a song for streaming at a website, you’ll need permission from the music publisher. The rules for how to pay (and how much to pay) have changed over the past decade.
• Payment to Music Publisher for Reproduction. For songs previously recorded and released in the U.S., permission can be obtained by using what is known as a compulsory license. In terms of payments, music publishers consider downloads the same as compact discs or cassette recordings. You must pay the compulsory rate per copy.
• Payment for Transmission. The Digital Millennium Copyright Act permits webcasters to obtain a statutory license for webcasts. That license permits webcasters to stream all the music they want provided they pay the royalties on the songs they broadcast. A webcaster who meets the requirements set forth below should seek a statutory license from:
Library of Congress, Copyright Office
101 Independence Avenue, S.E.
Washington, D.C. 20557-6400
If a webcaster doesn’t meet these requirements, than it’s back to square one: getting permission from each song publisher (song copyright) and music label (sound recording copyright).
Below are some of the criteria webcasters must meet to qualify for a statutory license. You can find all of the requirements at www.riaa.com.
- A webcaster may not play in any three-hour period more than three songs from a particular album, including no more than two consecutively, or four songs by a particular artist or from a boxed set, including no more than three consecutively.
- Prior announcements are not permitted and advance song or artist playlists generally may not be published. However, webcasters may announce the names of a few artists to promote the type of music played on the site or channel. If an artist’s name is announced, the webcaster may not specify the time that artist’s song will be played.
- Programs that are performed continuously, automatically starting over when finished, may not be less than three hours in duration. Merely changing one or two songs does not meet this condition. Additional parameters for these types of programming are set by the license.
To provide downloads (officially known as “digital phonorecord delivery” or DPDs) at a site, you’ll need to obtain permission from the owner of the song (music publisher) and owner of the sound recording (record company). Of course, if you have self-produced the recording and created the music, there’s no problem. But if not, you must get permission to permit downloads. Without permission, the owners can require that you remove the recording and perhaps make you pay financial damages. The same rules would apply for downloads as well as for streaming.
Music clearance firms
Developers who do not wish to go to the time and trouble of obtaining music permissions themselves can retain the services of music clearance firms. For a fee, these companies will request, negotiate, and process music permissions. Using such firms will usually be cheaper than retaining a music attorney, and they are often more effective. These firms are located primarily in New York, Los Angeles, and Nashville, the centers of the music business. One of the best known firms is BZ Rights and Permissions, Inc. (www.bzrights.com). For more information on clearance firms, read Getting Permission, by Richard Stim (Nolo).
Production music libraries
Production Music Libraries (“PMLs”) provide an inexpensive method of obtaining rights for original music and sound effects on a nonexclusive basis. PML music, which is primarily instrumental, is used in films, websites, slide shows, radio and television programming, commercials, software and multimedia, training videos, in-flight services, and similar applications.
Like stock photography, PML music is categorized by genre or mood (old time rock and roll, outer space, etc.) and is sold on compact disc collections on a royalty-free basis, for a blanket fee, or on a per use basis. A typical PML compact disc may contain ten to 15 original compositions, including a full-length version of each composition as well as shorter “tag” or “cue” version. Larger PMLs have hundreds of compact discs in their collection. Using the Internet, it is possible to search through these collections and hear samples.
Websites and computer programs often include third-party software—software “engines”— that drive the program and application software programs to support graphics, sound, and animation. A license from the copyright owner must be obtained to distribute third-party software with a multimedia program. To obtain such a license, contact the software publisher.
Privacy and Publicity Problems
Privacy and publicity problems arise when a website or software work uses photographs, video, film, or other images of an individual’s likeness or recordings of a person’s voice. This is a complex area of the law and privacy/publicity rights vary from state to state. The following is a brief overview.
The definitive work on these issues is The Rights of Publicity and Privacy, by J. Thomas McCarthy (Clark Boardman Callaghan).
Right to Privacy
The right to privacy is simply the right to be left alone. The law protects a person from humiliation, embarrassment, loss of self-esteem, or other injury to her sensibilities caused by the following types of activities:
• using a person’s name, likeness, or voice for commercial purposes, without authorization—for example, in an advertisement;
• entering or observing a private or secluded area without consent—for example, spying on a person’s home or office without permission to take photographs;
• publicly displaying an image that shows or implies something embarrassing and untrue about someone—for example, using a picture of an uninfected person in a work about sexually transmitted diseases in a way that implies that the person has such a disease; or
• publicly disclosing true, but private and embarrassing facts about a person that are of no legitimate public concern—for example, displaying film footage of a person hugging someone other than his or her spouse.
These privacy rights belong primarily to private individuals. Public officials (persons who hold important elective or appointed offices) and “public figures” have little or no right of privacy for acts relating to their public life. Determining if someone qualifies as a public figure can be difficult. Persons who are extremely influential and powerful, who frequently appear in the media, or who are in the forefront of public controversies, all qualify as “public figures.” This includes not only people we normally think of as “celebrities”—film and TV stars, rock stars, sports heroes, famous business tycoons, and so forth—but lesser-known individuals involved in public affairs—for example, the heads of the ACLU and NRA.
A person’s privacy rights cease when he dies. Thus, there are no privacy issues presented in using old photos or archival or newsreel footage of people who are dead.
Right of Publicity
The right of publicity is the right to control when and how one’s name, voice, or likeness may be used for purposes of advertising or trade—for example, to advertise or sell a product or service. Public figures—famous athletes or film stars, for example—can earn substantial sums by endorsing products and appearing in commercials. No one would pay for an endorsement if the right of publicity were not legally protected. Only human beings have a right of publicity; corporations, firms, and institutions do not.
Unlike the privacy rights discussed above, the right to publicity continues in some states for many years after a celeb-rity’s death. For example, in California, the right to publicity lasts for 70 years after a person’s death; in Oklahoma, 100 years. This means, for example, that it is illegal to use a photo of Marilyn Monroe or Elvis Presley for commercial purposes in California or Oklahoma without the consent of their estates. Because websites and most software programs are nationally distributed, permission must be obtained to use a deceased celebrity’s name, likeness, or voice for commercial purposes. That is, a developer normally cannot restrict distribution only to those states not providing privacy rights after a person dies.
First Amendment Limitations on Privacy/Publicity Rights
The rights to privacy and publicity are not absolute. The First Amendment to the U.S. Constitution guarantees freedom of speech and of the press. The First Amendment gives priority to the public’s right to know about newsworthy events of public significance. Courts have held that a person’s name or likeness may be used without consent where it is done for educational or informational purposes. This enables the news media to publicly disclose a person’s name, likeness, or other characteristics without permission for newsworthy and editorial purposes.
The First Amendment applies to software developers as well as to the news media. Under the First Amendment, a website or software developer has broad latitude to use a person’s image, voice, or name for educational, cultural, and artistic purposes. This is particularly true where public figures are involved. But if your purpose is primarily to sell a product or service, the First Amendment will not protect the use. For example, film footage of General Norman Schwartzkopf could be used in a website history of the first Persian Gulf War without violating the General’s privacy or publicity rights. Such a work has an educational purpose. However, the General’s right to publicity would likely be violated if the same footage was used in a commercial website to help sell its products—for example, a website for gun dealers.
Releases of Privacy/Publicity Claims
A release is simply a contract by which a person consents to the use of his name, likeness, or other element of his persona for the purposes specified in the release. A release should be obtained from any individual whose likeness, voice, name, or other identifiable characteristics are used in recognizable form in a website or software work that has a purely commercial purpose. It may be difficult to determine whether a work is just commercial in nature or has an educational, artistic, or cultural purpose so as to be protected under the First Amendment. In this event, the conservative approach is to obtain privacy/publicity releases.
In most cases, you’ll have to obtain any necessary releases yourself. Unless they happen to already have releases, it’s unlikely that most copyright owners will be willing to get them for you. Stock photo and stock footage houses customarily do not provide releases, although some will do so for an additional fee.
Commercial photographers customarily obtain releases from their models, so you might be able to obtain releases from them when you deal directly with a photographer. If a photographer or other copyright owner has obtained a release for the material you wish to use, make sure to ask for a copy and review it. Here’s what to look for:
• Make sure the release covers the material you want to use.
• The release should specify that the photographer may sell or assign the right to use the photos or other materials to third parties.
• If you intend to alter or otherwise change or distort the image, make sure the release allows this.
• A release should always be in writing. If the subject is a minor (under 18 years old), the release should be signed by his parent or legal guardian.
• Finally, the release should specify that it is irrevocable—otherwise the release could be terminated by the person giving it at any time.
If these requirements are not met, a new release must be obtained.
Below is a sample of a self-explanatory valid Publicity/Privacy Release, which may be used in connection with any kind of material.
The full text of this release is on the forms CD-ROM.
Multimedia Publicity/Privacy Release
In consideration of [NAME OF DEVELOPER]’s (“Developer”) agreement to incorporate some or all of the Materials identified below (the “Materials”) in one or more of its multimedia works (the “Works”), and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, I hereby grant Developer permission to use, adapt, modify, reproduce, distribute, publicly perform, and display, in any form now known or later developed, the Materials specified in this release (as indicated by my initials) throughout the world, by incorporating them into one or more Works or advertising and promotional materials relating thereto.
This release is for the following Materials (initial appropriate lines):
Visual likeness (on photographs, video, film, etc.)
Photographs, graphics, or other artwork as specified:
Film, videotape, or other audiovisual materials as specified:
Music or sound recordings as specified:
I warrant and represent that the Materials identified above are either owned by me, and/or are original to me, and/or that I have full authority from the owner of the Materials to grant this release.
I release Developer, its agents, employees, licensees, and assigns from any and all claims I may have now or in the future for invasion of privacy, right of publicity, copyright infringement, defamation, or any other cause of action arising out of the use, reproduction, adaptation, distribution, broadcast, performance, or display of the Works.
I waive any right to inspect or approve any Works that may be created containing the
I understand and agree that Developer is and shall be the exclusive owner of all right, title, and interest, including copyright, in the Works, and any advertising or promotional materials containing the Materials, except as to preexisting rights in any of the Materials released hereunder.
I am of full legal age and have read this release and am fully familiar with its contents.
Typed or Printed Name