1.
Digital rights issues for cross-media properties Prepared for Power to the Pixel Lab 2010 Gregor Pryor Partner Global Digital Media Team

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Executive summary <ul><li>Digital production and distribution is a core business driver for film industry moving forward </li></ul><ul><li>Latest production focus is on international cross-media property development </li></ul><ul><li>Clear divisional distribution and exploitation strategy attracts financiers </li></ul><ul><li>Beware digital seduction… </li></ul>

3.
About Reed Smith LLP <ul><li>Top 15 law firm in the world, over 1,800 lawyers </li></ul><ul><li>Dedicated Media and Technology practice consisting of over 80 lawyers globally </li></ul><ul><li>Ranked Tier 1 in Chambers 2009 for Film and Television Finance and Production and Digital Media </li></ul><ul><li>‘ Wired 100’ most influential people in digital media </li></ul><ul><li>Disproportionate number of lawyers who were previously in-house counsel </li></ul>

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<ul><li>What’s the difference between a lawyer and a trampoline? </li></ul>

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<ul><li>You take off your shoes before jumping on a trampoline… </li></ul>

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Cross-media realities <ul><li>Social networking is stimulating ‘referral’ behaviour and promotional brand-building </li></ul><ul><li>Content is syndicated and cross-pollinated across platforms and destinations for access on multiple devices </li></ul><ul><li>Cloud technology enables “Martini” model </li></ul><ul><li>But what does cross-platform really mean…? </li></ul>

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Cross-media realities <ul><li>Let’s turn to the music industry for an example… </li></ul>

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Cross-media realities <ul><li>‘ Pump it Up’ DVD series </li></ul><ul><li>335,000 single music sales </li></ul><ul><li>“ The first time it came on, I nearly fell off my rowing machine…” </li></ul><ul><li>Third DVD series alone sold over 200,000 </li></ul><ul><li>Raises important questions from a legal/rights perspective, starting in pre-production </li></ul>

9.
Cross-media realities <ul><li>What about film industry examples? </li></ul>

10.
Is cross-media really new? <ul><li>www.blairwitch.com </li></ul><ul><li>Developed in late ’80s, with a final production budget of $25,000 and a marketing budget of $1.2m – went on to gross $250m </li></ul><ul><li>3 rd most successful independent film of all time </li></ul><ul><li>Spawned merchandise, games, books, music, sequels </li></ul><ul><li>What would the marketing strategy be today? </li></ul>

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Overview <ul><li>Pre-production onwards: cross-media strategies and due diligence </li></ul><ul><li>Exploitation and distribution: ‘the continuation approach’ </li></ul><ul><li>Legal hygiene </li></ul><ul><li>Q&A/Discussion (also known as legal therapy or “free advice”) </li></ul>

12.
Cross-media strategies <ul><li>Planning </li></ul><ul><li>Research consumption patterns in your demographic, build business case </li></ul><ul><li>Seed your development – see Blair Witch </li></ul><ul><li>Identify partners </li></ul><ul><li>Prepare intellectual property portfolio and contractual framework </li></ul>

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Cross-media strategies <ul><li>Pre-production </li></ul><ul><li>Create a destination and syndication partners </li></ul><ul><li>Leverage social media </li></ul><ul><li>Seed your database </li></ul><ul><li>Selling and business development based on development works </li></ul><ul><li>Multiple production streams </li></ul>

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Cross-media strategies <ul><li>Production and distribution </li></ul><ul><li>Maintain continuity throughout production </li></ul><ul><li>Tightly defined release schedule across different platforms underpinned by affiliate/partner licences </li></ul><ul><li>Watch for tripwires – exclusivity, MFNs, co-ownership and territorial copyrights </li></ul><ul><li>Recoupment and profit </li></ul>

15.
Cross-media strategies <ul><li>Intellectual properties and laws </li></ul><ul><li>Copyright in all contributory sources </li></ul><ul><li>Performers’ rights </li></ul><ul><li>Moral rights </li></ul><ul><li>Trade marks </li></ul><ul><li>Database rights </li></ul><ul><li>‘ Image rights’ </li></ul><ul><li>Personal data </li></ul><ul><li>Privacy </li></ul><ul><li>Domains </li></ul><ul><li>Social distribution networks </li></ul>

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Cross-media strategies <ul><li>Good or bad? </li></ul>

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Cross-platform strategies <ul><li>Should cross-platform producers embrace P2P technologies as a means of seeding or distribution? </li></ul>

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Cross-platform strategies <ul><ul><li>Copyright remains the lynchpin – ignore people who tell you otherwise </li></ul></ul><ul><ul><li>© is a negative right – the right to restrict certain acts of exploitation </li></ul></ul><ul><ul><li>Clear contributions without holdback or restrictions to ensure no limitation on cross-media products </li></ul></ul><ul><ul><li>Be wary of ‘copyright sharing’, open source models </li></ul></ul><ul><ul><li>Copyright is the core asset and is mostly platform neutral </li></ul></ul>

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Cross-platform strategies <ul><li>Copyright exists in the following types of work: </li></ul><ul><ul><li>Literary works – books, formats, computer programs </li></ul></ul><ul><ul><li>Dramatic work – scripts, plays, mimes </li></ul></ul><ul><ul><li>Musical work – musical compositions </li></ul></ul><ul><ul><li>Artistic work – set designs, sequences, computer graphics </li></ul></ul><ul><ul><li>Sound recording – synchronised sound recordings </li></ul></ul><ul><ul><li>Film – fixation of sounds and images, soundtracks </li></ul></ul><ul><ul><li>Broadcast – transmission of sounds and/or images </li></ul></ul><ul><ul><li>Qualifying performance (dramatic, musical, reading, variety) </li></ul></ul>

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Exploitation and distribution <ul><li>Key acts restricted by copyright/rights in performances: </li></ul><ul><ul><li>Reproduction right </li></ul></ul><ul><ul><li>Communication to the public right - includes “broadcasting” (but not on the Internet) and making available </li></ul></ul><ul><ul><li>Distribution right - does not include digital distribution </li></ul></ul><ul><ul><li>Performance right - showing the work in public </li></ul></ul><ul><ul><li>Adaptation right </li></ul></ul><ul><ul><li>Rental and lending right </li></ul></ul><ul><ul><li>Correct terminology is critical because…. </li></ul></ul>

21.
Exploitation and distribution <ul><li>Issues specific to digital content: copying </li></ul><ul><ul><li>Streamed content – is there a reproduction? </li></ul></ul><ul><ul><li>If so, who makes the reproduction (i.e. who needs a licence): </li></ul></ul><ul><ul><ul><li>End user? </li></ul></ul></ul><ul><ul><ul><li>Content aggregator? </li></ul></ul></ul><ul><ul><ul><ul><li>Consider liability for authorising or procuring reproduction – how much involvement/control does the aggregator have? </li></ul></ul></ul></ul><ul><ul><ul><li>ISP? </li></ul></ul></ul>

22.
Exploitation and distribution <ul><li>Issues specific to digital content: broadcasting </li></ul><ul><li>Transmission of content on the Internet is not a broadcast unless it: </li></ul><ul><ul><li>takes place simultaneously on the Internet and by any other means (a simulcast); </li></ul></ul><ul><ul><li>is a concurrent transmission of a live event or part of linear programming </li></ul></ul><ul><li>Significance: A webcast falls under the broader ‘communication to the public’ right. </li></ul>

23.
Exploitation and distribution <ul><li>Issues specific to digital content: making available </li></ul><ul><ul><li>Means “making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them” </li></ul></ul><ul><ul><li>In other words…..on demand </li></ul></ul><ul><li>Significance: Prescriptive terminology in licence agreements </li></ul>

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Exploitation and distribution <ul><li>Issues specific to digital content: territoriality </li></ul><ul><ul><li>On the Internet, where does a restricted act take place? </li></ul></ul><ul><ul><li>How can copyright works be licensed on a territorial basis? </li></ul></ul><ul><ul><li>What laws are relevant to exploitation in different territories? </li></ul></ul><ul><ul><li>Can technology provide the answer? </li></ul></ul><ul><li>Significance: Economic incentives to license territorially </li></ul>

25.
Exploitation and distribution <ul><li>Issues specific to digital content: moral rights </li></ul><ul><li>Paternity – right to be identified as author/director/performer </li></ul><ul><li>Integrity – right to object to derogatory treatment </li></ul><ul><li>Privacy – right to prohibit/authorise issuing to the public works commissioned for private/domestic purposes </li></ul><ul><li>False attribution – self explanatory </li></ul><ul><li>Note: The Performances (Moral Rights, etc) Regulation 2006 extended moral rights protection to performers from 1 February 2006 </li></ul><ul><li>Significance: Moral rights cannot be assigned; must be waived </li></ul>

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Exploitation and distribution <ul><li>Issues specific to digital content: database rights </li></ul><ul><ul><li>A database is a collection of independent works, data or other materials which: </li></ul></ul><ul><ul><ul><li>are arranged in a systematic or methodical way; and </li></ul></ul></ul><ul><ul><ul><li>are individually accessible by electronic or other means </li></ul></ul></ul><ul><ul><li>Database rights result from substantial investment in obtaining, verifying or presenting the contents </li></ul></ul><ul><ul><li>Infringement by extraction and/or re-utilisation of whole/substantial part or repeated and systematic extraction and/or re-utilisation of insubstantial parts </li></ul></ul><ul><ul><li>Significance: fanbases, crowdsourcing, communities = targetted advertising = value </li></ul></ul>

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Exploitation and distribution <ul><li>Other considerations: </li></ul><ul><li>Trade marks, passing off and domain names </li></ul><ul><li>Trade marks: trade mark licences may be required for inclusion in digitally transmitted content </li></ul><ul><li>Is inclusion in the work incidental? </li></ul><ul><li>Consider celebrity endorsement claims – does content feature a person whose identity has become a brand? </li></ul><ul><li>Several projects scuppered by domain name mistakes </li></ul><ul><li>Personal data and privacy </li></ul><ul><li>Personal data has many forms – Naomi Campbell leaving a Narcotics Anonymous meeting </li></ul><ul><li>No statutory right of privacy in the UK, but largely protected by law of confidence </li></ul>

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Exploitation and distribution <ul><li>New copyright models – Creative Commons, open source </li></ul><ul><li>Strong tools for collaborative creation and licensing </li></ul><ul><li>Viewed with fear or scepticism by financial community </li></ul><ul><li>http://wiki.creativecommons.org/FAQ </li></ul><ul><li>Use in conjunction with legal advice </li></ul>

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Legal hygiene <ul><li>Chain of title for all properties </li></ul><ul><li>Property portfolio bible </li></ul><ul><li>Retain originals and get signatures for everything </li></ul><ul><li>Take advice </li></ul><ul><li>Conclude short-term deals if unsure of proposition </li></ul><ul><li>Collect money that is yours to collect </li></ul><ul><li>Enforce rights in your properties </li></ul>

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Legal hygiene Licensor Licensee Non-exclusive Exclusive Time-limited Perpetual No sub-licensing or assignment Can sub-license and assign Certain territories only Worldwide Limited by restricted act (reproduction plus broadcast or making available) All forms of exploitation restricted by copyright Restricted uses No restricted use Advance/royalty/revenue share Free/promotional/ancillary

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Legal hygiene <ul><li>Grant clauses - heard these before? </li></ul><ul><li>Copy, adapt, edit, transmit, cache, sell, rent, perform, display, exhibit, distribute, analyse, compile, download, upload, sideload, modify, translate, re-format, format, encode, decode, translate, store, use, view, exploit, dub, re-produce, republish, broadcast, make available, compress, frame, fixate, access, execute, synchronise… </li></ul><ul><li>(Note different terminology in different territories) </li></ul>

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Legal hygiene <ul><li>What is the Internet? </li></ul><ul><li>The global communications system of computer networks accessible by the public which interconnect, either directly or indirectly, individual computers and/or networks using Transmission Control Protocol/Internet Protocol (or derivatives or future versions thereof) [and which enables users to engage in two way transmissions of data over such networks in order to transmit and receive content] [and any analogous or derivative system now existing or hereafter invented]. </li></ul><ul><li>Why is that different to the World Wide Web? </li></ul><ul><li>A network of interlinked documents and resources residing on the Internet that utilise hypertext protocols and language, which are available for display using browser software. </li></ul>

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Legal hygiene <ul><li>Licensing models </li></ul><ul><li>Content can be licensed and distributed according to: </li></ul><ul><li>Delivery media </li></ul><ul><li>Fixed media </li></ul><ul><li>Device </li></ul><ul><li>Time </li></ul><ul><li>Business model </li></ul><ul><li>Product set </li></ul><ul><li>Platform </li></ul><ul><li>Distribution models should be carefully planned and monetised. Aggregators should be held to account. </li></ul>

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Legal hygiene <ul><li>How to determine the model that works for you </li></ul>Licensor Licensee Are specific and limited media uses necessary? Why do they need general, broad media definitions? Is there are convergence risk? If so, short term licence? Will a longer term or options to continue prejudice my product? Will a detailed platform specification help? Will a broad platform specification cause problems?

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Legal hygiene <ul><li>Trends </li></ul><ul><li>Slight revitalising of finance models </li></ul><ul><li>360 º commissioning </li></ul><ul><li>Focus on profitability instead of revenue </li></ul><ul><li>Bundled premium products </li></ul><ul><li>End of love affair with advertiser-funded content distribution </li></ul><ul><li>New consumption formats </li></ul><ul><li>Reduced production costs </li></ul>

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Legal hygiene <ul><li>For producers </li></ul><ul><li>Ensure your rights are cleared </li></ul><ul><li>Aggressive holdbacks – ‘no warehousing’ clauses </li></ul><ul><li>Concerned about compliance – make licence conditional </li></ul><ul><li>Set out conditions precedent for exploitation </li></ul><ul><li>Include approval mechanism for syndication and new models </li></ul><ul><li>Consider short exclusive windows </li></ul><ul><li>Question those promising digital nirvana </li></ul><ul><li>Consider collective licensing/publishing </li></ul>

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Legal hygiene <ul><li>How to protect your content </li></ul><ul><li>Viacom v Google case result ratifies burden of enforcement in the US and, for the most part, in Europe </li></ul><ul><li>Newzbin case provides some comfort for rightsowners </li></ul><ul><li>Seek recourse for direct commercial exploitation </li></ul>

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Future <ul><li>Web 2.0 applications </li></ul><ul><li>Powered sharing (uploading/downloading) </li></ul><ul><li>Network as platform </li></ul><ul><li>Leverage metadata </li></ul><ul><li>Service hosts and access via API </li></ul><ul><li>Web 3.0 applications </li></ul><ul><li>Open source culture </li></ul><ul><li>Virtual user environment </li></ul><ul><li>Semantic/artificial intelligence </li></ul><ul><li>Cloud storage and data mining </li></ul>

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Future <ul><li>Ongoing issues for producers </li></ul><ul><li>Reputation management </li></ul><ul><li>Street teams and commercial spoofing </li></ul><ul><li>E-money and user-to-user commerce </li></ul><ul><li>Open versus closed platforms </li></ul><ul><li>Fraud, misrepresentation and criminal behaviour </li></ul><ul><li>Adaptation and derivative works </li></ul><ul><li>Jurisdiction and enforcement </li></ul><ul><li>Search engine optimisation </li></ul>

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<ul><li>Gregor Pryor </li></ul><ul><li>Partner </li></ul><ul><li>Digital Media Team </li></ul><ul><li>Email: gpryor@reedsmith.com </li></ul><ul><li>Phone: +44 203 116 3536 </li></ul>