THE NEED FOR VISION

IVAN HOFFMAN, B.A., J.D.


In the 26+ years that I have been practicing law, I have seen that rights owners or other contracting parties frequently fail to exhibit a wide vision of the market for their product or service. As a result, they often make deals that manifest that lack of vision and end up giving away or failing to ask for rights that can turn out to be very valuable down the line, if not in the immediately foreseeable future. Thus the need for vision.

If the computer age has taught us anything it is that today's version of a product can become tomorrow's new media darling. And those who own or are dealing for the rights to today's version are in a position to capitalize upon that newly created market if they also own or acquire the rights to the later versions. The product can be a book, a web site, a graphic, a recording or song, some software or the like. Someone will own those other rights and be in the position to make money off of them.

Often the lack of vision comes from simply not understanding the nature of the parties' rights in the work. The copyright rights that attend the original creation grant rights to exploit and make money in ancillary and related areas. These rights can be kept or licensed to others in exchange for a share of the future revenue. What most often occurs is that for lack of vision, usually rationalized in terms of lack of money, one party chooses to spend his or her limited capital in ways that reflect short term beliefs and not long term vision. I've seen book publishers for example, spend thousands of dollars having a cover designed but refuse to spend a few hundred dollars to have a contract drafted giving that publisher the rights to that cover art. The thousands thus spent become money down the proverbial drain.

Multimedia conversion of assets from one area to another abound today and those that do not recognize the opportunities so presented may find themselves relegated to their own self-imposed island of regret.

Let me give but 3 examples. Since I do not know the actual facts in any of these examples, let me simply speculate based upon the United States Copyright law and my years of experience making deals.

I recently visited Universal Studios in Hollywood. It is a multimedia marketer's dream world. Logos, trademarks etc. abound. Marks that had lives in one media have found themselves licensed for other media. I went on the Jurassic Park ride. The marquee sign for the ride carries the same distinctive design as the logo for the movie's title, which in turn was the same distinctive design as for the original book cover. This makes marketing sense of course since the identification of one successful incarnation of a product should be used to identify that same product in another media. Someone designed and contracted for the design in that book cover and as a result, someone owns the rights to the design of that book cover.

Since I have clients who are both artists as well as publishers and authors, I take no position on who *should* own the rights but merely to say that all parties to the transaction should be fully aware of the value of controlling those rights.

Many publishers and authors hire independent contractor cover artists. Those publishers and authors must know that if they, as the publisher or author, do not have a valid, express, written and signed agreement conveying to the publisher or author the rights to the independent contractor's artwork for that book, the publisher or author owns no rights beyond perhaps some non-exclusive right to use the artwork for that particular book. Ancillary or subsidiary rights remain with the creator-artist. In the event that the book becomes a best seller, the copyright in that artwork is retained solely by the artist, absent such an agreement.

Therefore, in the Jurassic Park example, the artist, and not the author or publisher, might have retained those rights and then be in a position to license that artwork for many, many dollars for use as a logo for both the motion picture as well as for the ride, for tee-shirts, for underwear and countless other merchandising items. On the other hand, if the artist gave away those rights, it would be the author or publisher who would be in a position to exploit and make money from those rights, with or without the participation of the artist depending upon the deal the artist made.

In any event, it's all gravy money since these ancillary rights merely attend the original ownership of copyright. No additional work is usually required except going to the bank to deposit licensing fee checks; that and sipping margaritas on some beautiful island beach and allowing the money to roll in along with the waves.

The party that either did not acquire those rights or gave them up would almost certainly be regretting that choice, either because he or she acted out of lack of vision or because he or she did not want to spend the extra money to protect their rights, which is a symptom of lack of vision. Not understanding value because of an inordinate focus on cost is a sign of lack of vision.

Oh! You may say, that happens only once in a lifetime. And you may be right but once in a lifetime is all you need to live your life with regret. As opposed to with joy with some exotic drink in one hand.

Let me give another example. Many decades ago, a songwriter wrote and recorded a song that used electronically altered voices that he called "Chipmunks" and the recording that embodied that song became a worldwide hit. Subsequently, the Chipmunks became both 2 and 3 dimensional cartoon figures that now have appeared on gazillions of school lunch pails, children's bedding etc. etc. including live action characters that appeared also at Universal. Money on top of money for the original creator or the person who owns the rights to that creation. Vision.

Another once in a lifetime example? Now that makes 2 once in a lifetime examples.

Third example. I teach a class called "Internet Marketing and Law for Modern Publisher" and the single theme of that class is the subject of this article: see the Internet with vision. And then either acquire or retain the necessary rights to capitalize upon this revolutionary new medium. Someone is going to be making the money and it should be you.

A new version of an older idea has recently come onto the market now thanks to the Internet-the electronic book. This is not downloading entire books onto 8 ½ by 11" paper but rather to a hand held device that allows the user to log onto a web site and obtain the entire book in the portable device. It allows for a full text search and sound. Thus it represents a leap forward into the high tech world of book publishing. Not the be all and end all but merely an example of what may be.

Given that many of my readers are small to medium sized publishers or self-published authors frustrated with the world of hard copy book publishing with the distributors lock on the market and the closed door policies of the chains, it is the visionary publisher/author that may see a niche here and seek to take advantage of it. But the publisher's ability to take advantage of this market niche depends upon whether or not, when the contract with the author was negotiated, the publisher had the vision to acquire the appropriate rights in specific enough language to avoid confusion and ambiguity in order to capitalize on this market. And the same goes for the author who perhaps should have held onto these rights.

The Internet is perhaps the clearest example to me of a third once in a lifetime example.

CONCLUSION

Now clearly no one can say where the next Jurassic Park is coming from and that of course is exactly my point. If you believe enough in your work, whether you are an artist, author, publisher, songwriter, recording artist or otherwise, then you have to believe that each creation is going to be the big one. As a result, you have to be able to exercise your vision and make certain that your agreements comport with that vision.

Don't find yourself looking back at your life through the eyes of regret.

© 1998 Ivan Hoffman

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This article is not intended as a substitute for legal advice. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. You should consult with an attorney familiar with the issues and the laws.

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No portion of this article may be copied, retransmitted, reposted, duplicated or otherwise used without the express written approval of the author.


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