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137

An important distinction to understand is the difference between ownership of a copyright in a work and ownership of a copy of a work. Ownership of a copy the material object in which a copyrighted work is embodied (e.g., a book, CD or videocassette) -- carries with it no interest in the copyright.

Ownership of a copyright, or any of the exclusive
rights under a copyright, is distinct from
ownership of any material object in which the
work is embodied. Transfer of ownership of any
material object, including the copy or
phonorecord in which the work is first fixed, does
not of itself convey any rights in the copyrighted
work embodied in the object; nor, in the absence
of an agreement, does transfer of ownership of a
copyright or of any exclusive rights under a
copyright convey property rights in any material

object. 138

Ownership, possession or any other attachment to or relationship with a copy of a copyrighted work (including obtaining access to it through a computer network or other service) does not entitle one to exercise any of the exclusive rights of the copyright owner (e.g., to reproduce it or to perform it publicly).

a. TRANSFER OF OWNERSHIP

Copyright ownership, or ownership of any of the exclusive rights (in whole or in part), may be transferred to one or more persons. 139 A transfer of rights must be in

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139

See 17 U.S.C. S 201(d)(1) (1988) ("ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law, and may be bequeathed by will or pass as personal property by the applicable laws of intestate succession").

writing and must be signed by the transferor.140 A transfer may occur through an assignment, exclusive license, mortgage, "or any other conveyance, alienation, or hypothecation" of a copyright or any of the exclusive rights.141 A transfer of copyright ownership may be limited in time or in place, but it must be an exclusive transfer of whatever right or rights are involved (i.e., nonexclusive licenses are not considered transfers of ownership).142 Any of the exclusive rights in the work14 may be separately transferred and owned, and the owner of a particular right is considered the "copyright owner" with respect to that right."

In the case of any copyrighted work other than a "work made for hire," all transfers of copyright ownership (as well as all nonexclusive licenses) executed by the author of the work may be terminated by the author 35 years after the transfer.145 This right to terminate, intended to protect authors, cannot be waived by contract or other

144

140

17 U.S.C. $ 204(a) (1988). An exclusive license is considered a transfer of copyright and, therefore, must be in writing. Although an exclusive license may be limited in time, place or scope, it nevertheless extends the benefits of copyright ownership with respect to the rights granted to the licensee for the duration of the license. The rights of a copyright owner may also be licensed on a nonexclusive basis to one or more licensees. The Copyright Act does not require nonexclusive licenses to be in writing.

141

17 U.S.C. S 101 (1988) (definition of "transfer of copyright ownership"). With the exception of transfers by operation of law, all transfers of copyright ownership must be in writing. 17 U.S.C. $ 204(a) (1988) ("transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent").

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143

See discussion of the exclusive rights of a copyright owner infra pp. 63

72.

144

See 17 U.S.C. $ 201(d)(2) (1988); 17 U.S.C. S 101 (1988) (definition of "copyright owner").

145

See 17 U.S.C. $ 203(a) (1988); see also 17 U.S.C. S 304(c) (1988 & Supp. V 1993).

agreement. 146 However, termination is not automatic; an author must assert his or her termination rights and comply with certain statutory requirements to regain copyright

ownership. 147

b. LICENSING

The exclusive rights of a copyright owner may

be licensed on an exclusive basis (i.e., copyright ownership in one or more rights is transferred by the copyright owner) or on a nonexclusive basis (i.e., the copyright owner retains ownership of the copyright and may grant similar licenses to others). A nonexclusive licensee is not a copyright owner and thus does not have standing to sue for any infringement of the copyright in the work by others.14 Unlike exclusive licenses, nonexclusive licenses need not be in writing."

Limitations on the exclusive rights, such as the first sale doctrine, fair use or library exemptions, may be overridden by contract. 150 However, such contract terms

149

146

17 U.S.C. $ 203(a)(5) (1988) ("[t]ermination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant").

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148

See 17 U.S.C. S 501(b) (1988) ("legal or beneficial owner of an exclusive right under a copyright is entitled ... to institute an action for any infringement of that particular right committed while he or she is the owner of it"). In certain circumstances, television broadcast stations and others are treated as legal or beneficial owners and may bring actions for infringement by cable systems and satellite carriers. See 17 U.S.C. S 501(c), (d), (e) (1988).

149

However, like exclusive licenses, nonexclusive licenses may

be terminated 35 years after the effective date of the license. See 17 U.S.C. SS 203(a) (1988), 304(c) (1988 & Supp. V 1993).

150

For example, a user could decide to participate in a licensing program covering all copies made, for a nominal fee per copy, rather than to indulge in the record-keeping necessary to determine which copies are subject to a licensing fee and which are fair use. Copyright owners may not be allowed, however, to seek to increase the term of protection without implicating the doctrine of copyright misuse. Cf. Saturday Evening Post Co. v. Rumbleseat Press, Inc., 816 F.2d 1191, 1200 (7th Cir. 1987) (claims of misuse must be judged by

can be enforced only under state law. For instance, the fair use of a work (outside the scope of the license) by a licensee whose license precludes any use other than that specified by the license would not be an infringement of copyright, but would be a breach of the license agreement. Licenses and other contracts cannot transform noninfringing uses (such as fair uses) into infringements; they can, however, make such uses violations of the terms and conditions of the agreements:

A library that has acquired ownership of a copy is
entitled (under the Copyright Act] to lend it
under

any

conditions it chooses to impose. This does not mean that conditions on future disposition of copies or phonorecords, imposed by a contract between their buyer and seller, would be unenforceable between the parties as a breach of contract, but it does mean that they could not be enforced by an action for infringement of copyright. 151

Licensing issues are, and will continue to be, significant in the context of the development of the NII. Services on the NII will provide the opportunity for new uses for copyrighted works. If rights with respect to these new uses are not expressly granted or retained in license agreements, conflicts will arise between copyright owners and licensees. For instance, public display on a bulletin board

system may not have been contemplated in licenses granting a public display right that were executed before the advent or proliferation of such systems.

antitrust standards); Lasercomb America, Inc. v. Reynolds, 911 F.2d 970, 979 (4th Cir. 1990) (contract purporting to license copyright for 99 years rendered copyright owner guilty of copyright misuse). The doctrine of copyright misuse might be implicated in other situations where the scope of protection is significantly expanded. 151

HOUSE REPORT at 79, reprinted in 1976 U.S.C.C.A.N. 5693.

not

even

Some argue that new

that new uses which were contemplated at the time of licensing but which fall within rights granted, such as the public display example above, should automatically fall within the scope of the license. Others contend that new uses which are not contemplated and, therefore, not specifically mentioned in a grant of rights should be considered retained by the licensor in the case of a complete assignment of rights.

Failure to contemplate possible future developments, of course, is not a new problem, and is one based primarily in contract rather than copyright law. Whenever new technologies have produced a new use for works, courts have been called upon to decide whether the new use is covered by old licenses. 152 That is the proper jurisdiction for such determinations. License agreements must be interpreted individually and under the law of the governing

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A variety of licensing methods will be possible as the NII develops. For instance, rights in copyrighted works offered via the NII may be licensed off-line or on-line. They may be licensed directly (through individual transactions between the rightsholder and the licensee) or through other licensing arrangements, such as voluntary collective licensing. Licensing of rights may be on a peruse, per-work or other basis.

152

See, e.g., Harper Bros. v. Klaw, 232 F. 609 (S.D.N.Y. 1916) (license to dramatize "Ben Hur" in a play did not include right to produce a movie, but licensor enjoined from producing movie because licensee's right to produce a play would be harmed by licensor's production of a movie); L.C. Page da Co. v. Fox Film Corp., 83 F.2d 196 (2d Cir. 1936) (grant of exclusive "moving picture" rights embraced technical improvements in movies that might be developed during the term of the license; thus, license held to cover "talkies"); Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150 (2d Cir.), cert. denied, 393 U.S. 826 (1968) (1930 license of film rights in a play, when television was a known technology but its full impact not yet realized, included television rights; as experienced businessman, licensor had reason to know of new technology's potential and had burden of negotiating exception).

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