DERIVATIVE RIGHTS AND WEB SITES
IVAN HOFFMAN, B.A., J.D.
Owns the Copyright in Your Web Site?" I wrote that today's web site
can be tomorrow's feature length motion picture. The right to turn copyrighted
material from one form of expression to another, referred to as creating
a derivative work, is one of the exclusive rights granted to the original
copyright proprietor for most forms of copyrights.
Someone owns the rights to create those derivative
works for all protected material and that someone is in a position to capitalize
upon those rights. There is the potential for large sums of money to be
gained by the ownership and licensing of these derivative rights. If you
are the owner of those rights, rights in a book or a photograph or other
such material that someone wants to put up on a site, the Internet presents
copyright proprietors with opportunities for exploitation of their protected
assets. But in order to know how to exploit those assets, it seems important
to first know they exist and who owns the rights therein.
The original creator of the work, be it author, artist,
sculptor, song writer or other such creator, is most often the copyright
proprietor of the work. The premise under the United States' Copyright
Act is that such creator is the owner of all rights in that creation (unless
it is made under a work made for hire arrangement, which is not the subject
of this article. You may read an article by that name on my site. Click
on "Helpful Articles for Writers and Publishers.") That proprietor may
exploit her or his creation in other media and forms of expression directly
or may license the right to create these derivative works to others.
However, there is a cautionary note here: since the
original creator may have entered into one or more contracts regarding
the exploitation of his or her work, such as with a book publisher for
example, the contract or contracts must be examined to make certain these
rights have not been given away to that other party.
There are two sets of relationships that should be
explored in determining which party has the rights to create these works
and in turn make money from them.
AS BETWEEN CREATOR AND LICENSEE
This is the primary relationship. The creator may
either not be in a marketing position to create certain derivative works
or may not desire to and may instead license these rights to a third party.
The terms of that license must be extremely clear and unmistakable if the
parties are to avoid any confusion about who can do what and who has to
pay what as a result of the exploitation. If there is any vagary about
the provisions and the scope of the license, a cloud on the title and the
rights may result and that may cause not only litigation but a reduced
right of further exploitation.
These are some but certainly not all of the issues
that should be covered in the license, which license must be in writing
and signed by the parties:
What is the exact nature of the copyrighted material
to be licensed? Is it a photograph, a piece of text, some graphics, software,
or something else? This should be spelled out.
What kind of rights are being granted? Is it for
use on a web site only? Does the licensee have the right to make other
uses, other derivative works, from the derivative work so created? Section
103 of the United States Copyright Act of 1976 states, in part:
…(b) The copyright in a compilation
or derivative work extends only to the material contributed by the author
of such work, as distinguished from the preexisting material employed in
the work, and does not imply any exclusive right in the preexisting material.
The copyright in such work is independent of, and does not affect or enlarge
the scope, duration, ownership, or subsistence of, any copyright protection
in the preexisting material.
This part of the statute means that the licensed
creator of a derivative work owns the copyright in that part of the work
that he or she has added to the original copyright and gains no rights
to the underlying copyrighted work. However, the parties may also bargain
for the right to own the derivative work as well and this must be spelled
out in the license agreement.
Of great importance is the right of the licensee
to further license the licensed work as well as the derivative work created
under the license. This means that even if the original copyright proprietor
has licensed the use of a protected work on a web site, the license must
clearly spell out whether that licensee has the right to license others
on the Web or otherwise to use either the underlying copyright or even
the derivative work created under that license. This is quite important
because the marketing of the licensed work and the derivative work to other
sites and in other media may impact upon the marketability of the underlying
What is the duration of the license? Is it for a
fixed term of years? Are there options and if so, are there conditions
to the exercise of those options and if so, by whom may those conditions
be determined? Is it worldwide? Is it in all languages?
What is the license fee to be? Is it a flat fee?
Does the licensor get a percentage of the income, if any, derived from
the derivative use of the work? If so, for how long do these rights go
on? How is income defined? Is it gross or net, and if net, how is that
AS BETWEEN SITE OWNER AND WEB SITE DESIGNER
Certainly, the web designer is a creator in her or
his own right and so the previous discussion applies to the relationship
between the designer and the site owner as well. However, there are some
issues the parties to the web design agreement should face in addition
to the foregoing ones.
In the web site design agreement, which must be in
writing and signed by the parties, the rights to the designer's creativity
must be clearly spelled out. If the site owner is to gain rights to these
creations, the license must be clear as to what rights are being transferred.
Is the designer transferring all rights to her or
his creations? Is this a blanket transfer for all media, in perpetuity,
throughout the world, in all languages? On the other hand, is the license
of the designer's creativity for use only on the Web and only for this
web site? Or may the owner further license the creativity elsewhere, whether
on the Web or in other media?
Are there other conditions for the right to use the
licensed material set forth? For example, suppose that the site owner brings
in another designer at some subsequent time to make revisions or modifications
to the site. Does the site owner continue to enjoy the right to use the
original licensed material? What about the designer's rights to maintain
some artistic control over her or his licensed material?
How or in what media if any may the web site owner
use the underlying copyrighted material outside of the web site? And how
or in what media may the designer use the web site and her or his creations
on it in other media?
There are many, many other issues that may arise
and should be covered in the agreement between designer and site owner
and the foregoing are certainly not intended to be exhaustive of those
These are but a few of the many issues that arise
when copyrighted material is licensed, whether for the Web or otherwise.
That I have chosen to focus on web sites is but one example. Licensing
of protected material can take many forms and in many other media. For
other examples, you might want to read "The Use
of Protected Materials in Multimedia Projects."
Certainly the web site itself may be the original
copyrighted work and so the site owner and the owner of the rights to that
web site may then in turn be the licensor instead of the licensee.
The parties, both creator as well as licensee, should
pay careful attention to the terms of the license so that both parties
know their rights and duties.
Someone is going to be in a position to exploit the
rights of some protected material and the agreement between the parties
should make it as clear as possible which party that is and what the scope
of that party's rights are.
© 1997 Ivan Hoffman
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.
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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