Gray Cary Ware & Freidenrich LLP 

Online Contracting: Content Licensing

By Mark F. Radcliffe    Bio    Email   
Gray Cary Ware & Freidenrich LLP 

The advent of widespread broadband Internet access means that film and television will be available on the Internet.  In addition, music will be used very broadly. 

The exploitation of existing works, such as music, films and TV programs, can raise difficult problems of “clearing” the rights in such content for use in the new media.  Many of these works are the subject of existing agreements and their use in a new medium may result in multiple challenges.

For example, when the Walt Disney Co. introduced the video cassette version of “Fantasia,” the company found itself in a four-way battle over the rights with the estate of Igor Stravinsky (the composer of the underlying work on which the soundtrack was based), the Philadelphia Orchestra (which recorded the soundtrack) and the estate of Leopold Stokowski (the conductor who adapted the “Sorcerer’s Apprentice” for use in the soundtrack).[1]  Such issues will become even more complicated on the Internet when broadband permits worldwide distribution of films over the Internet.

The answer to this question can be critical to the success of a company.  For example, Jonathan Tasini, one of the plaintiffs in the National Writer’s Union suit against major magazine publishers (New York Times Co., Newsday, Time, Inc., Atlantic Monthly) and aggregators (Mead-Data Central Corporation and University Microfilms, Inc.) wrote to the Chairman of the Securities and Exchange Commission to ask that he review the registration statement for the initial public offering of the New York Times website.  He described the website as a “virtual copyright infringement machine”.  The right of magazine publishers to exploit articles by freelancers on CD-ROMs and commercial data bases without additional payments was challenged by the National Writers Union.  After the authors initially lost in the District Court, the Second Circuit overturned the decision and stated that the publisher could not rely on Section 201(c) of the Copyright Act for their licensing of articles written by freelancers to NEXIS and UMI.[2]  The Second Circuit stated that NEXIS and the UMI database were not “revisions” of their original collective works permitted under Section 201(c).  The Supreme Court granted certiorari in this case.  More recently, two class action suits, one in New York and one in San Francisco, were filed to assert these rights.

The release of Harry Potter and the Prisoner of Azkaban in 1998 illustrates one of the many risks of Internet commerce.  The publishers followed established tradition and published the book first in the United Kingdom and several months later in the United States.  But Scholastic Inc., the United States publisher, was horrified to find out that many American consumers were purchasing the book from Amazon.com’s United Kingdom Web site. 

Scholastic learned its lesson.  When it released Harry Potter and the Goblet of Fire in July 2000, it granted Amazon permission to begin shipping 250,000 advance copies eight days before a release date imposed on all other booksellers.  The owners of bricks and mortar bookstores were compelled to sign agreements promising they would not sell the books, read from the books, display the books or even break the seals on the cartons of the books before 12:01 a.m. on July 8. 

Fortunately, case law developed in the United States during the emergence of other media - the introduction of “talking” movies, the advent of television and the development of the home video market - offers several lessons for those wishing to exploit works in new media.  Courts prefer to interpret the language of contracts based on the intent of the parties.  The contractual language, however, often is ambiguous, and the intent difficult to determine after many years.

The potential web broadcaster faces important legal hurdles in developing a site.  The problem is complicated by the novelty of the rights needed to create, distribute and exploit content from a website.  The legal issues are complicated because the copyrightable works which are combined into a website¾books, computer software, photographs, film and music¾arise in separate industries and the rights needed are global.  These industries have developed their own legal customs and traditional license terms.  The book publishing industry, for example, has a tradition of long and comprehensive contracts.  The television industry on the other hand, frequently works from shorter, more informal documents.  In addition, Internet broadcasts generally require a developer to obtain rights beyond those traditionally granted in these industries.  The situation is similar to that faced by the movie industry by the introduction of the home video market but is even more complex due to the additional rights required.

The failure to successfully foresee what rights the developer will need in creating the website could result in the significant impairment of its ability to create the work or exploit it.  For example, many film companies were surprised by the advent of the videocassette rental market.  Many licenses for the rights in such films were drafted prior to the introduction of the videocassette and the videocassette recorder.  Consequently, even sophisticated film companies did not have the right to distribute videocassette versions of the films which they had distributed for performance in theaters.[3]

Overview of Potential Problems for Website Broadcasters.

Limited Media Rights.  The “owner” (such as a film company) of the work may not have the rights to exploit the existing work in a new media or format.  This problem will be particularly acute with adaptations of third party works, such as books or plays, where the author may have retained significant rights.

Limited Scope of Rights.  This problem is similar to the one described above.  However, it is sufficiently important to warrant special attention.  The development of websites will generally require significant modifications of the original work.  These rights may require contacting several different entities to obtain the rights, such as the owner of the underlying work.  In certain cases, actors may have individual contracts with a studio which would require permission to use their name and likeness for uses beyond a particular movie.

Music Rights.  The licensing of music presents special problems for websites, because of the non-traditional manner in which it is used.  Most of the standard performance and synchronization licenses for television programs and movies do not include rights necessary to create websites.  The traditional collective society such as ASCAP and BMI only have the right to license public performances of music within the United States, yet the web is global and the public performance is  similarly “global.”  The Digital Millennium Copyright Act of 1998 has dramatically expanded the scope of the new “public performance” right for sound recordings.

Interaction with Common Industry Provisions.  The creation of websites may result in unanticipated consequences under common provisions in industry agreements.  For example, if video becomes available “on demand” for individual shows, how will it be treated under the current syndication structure which assumes that the broadcaster will control the time at which the program is viewed?  Similarly, existing agreements with networks or other distributors may hurt the ability of a producer to exploit the rights online.

Liability for Infringement.  Given the uncertainty both in the scope of rights needed and the effect of existing agreements, the scope of liability for infringement for each party will probably be heavily negotiated.  The parties should be aware of the statutory warranty of non-infringement of third party rights which arises for “transactions in goods” under the Uniform Commercial Code.[4]  Although it rarely applies in traditional media industries, it may apply to websites.  This liability is in addition to any contractual indemnity.

Back to the Future:  Interpreting Pre‑Existing Agreements

The use of existing content (such as music, film and television) will be critical to the long-term success of the Internet industry.  Much of this content is the subject of pre-existing agreements which do not anticipate this new medium.  Yet copyright laws and the courts in the United States have faced this problem several times before in this century:  the introduction of “talking” motion pictures, the advent of television, and the development of the home video market.  The courts have wrestled with how to apply existing agreements to these new technologies.  Professor Nimmer, the authoritative author of Nimmer on Copyright,  has summarized the two possible approaches as follows:  the “preferred approach” is that the “licensee may properly pursue any uses which may reasonably be said to fall within the medium as described in the license” and an alternative (less preferred) approach that “a license of rights in a given medium (e.g. ‘motion picture rights’) includes such uses as fall within the unambiguous core meaning of the term (e.g. exhibition of motion film in motion picture theaters) and excludes any uses which lie within the ambiguous penumbra (e.g. exhibition of a motion picture film on television).  Thus, any rights not expressly (in this case meaning unambiguously) granted are reserved.”[5]

The first approach is best illustrated in the well-known case of Bartsch v. Metro-Goldwyn-Mayer.[6]  The court was faced with the question of whether the assignment of “motion picture rights” to a musical play executed in 1930 included the assignment of the right to permit broadcasting of the film by television.  Television technology was not in existence in 1930.  In fact, television was not introduced until 1941, more than ten years after the date of the assignment.  The assignment stated that the rights granted were “to project, transmit or otherwise reproduce the said work or any adaptation or version thereof, visually or audibly by the art of cinematography or any process analogous thereto and to copyright, vend, license and exhibit such motion picture photoplay throughout the world.”[7]

Although the district court had looked to the phrase “process analogous to”,[8] the Second Circuit Court of Appeal focused on the grant of rights to “copyright, vend, license and exhibit such motion picture photoplay throughout the world.”[9]  The Second Circuit concluded that the issue was whether this grant permitted the “exhibition” of the photoplay by television.  The court found that the term “exhibit” included the television technology which would become commercially available almost a decade later.  This decision was based on the trial court’s finding that in 1930 the future possibilities of television were recognized “by knowledgeable people in the entertainment and motion picture industries.”[10]  This distinction was important because it permitted the Second Circuit to distinguish the La Shelle[11] case.  The court noted that the La Shelle case involved technology which was completely unknown at the time.  The court also distinguished the Third Circuit’s Ettore[12] decision on the basis that Bartsch was an “experienced” business man should be “bound by the implications of the language he accepted when he had reasons to know of the new medium’s potential.”[13]

The Ettore decision, on the other hand, adopted the second approach.  The court decided that a license granted by Ettore, a prizefighter, to make a motion picture of this 1936 fight did not permit television broadcast of the motion picture.  This decision was strongly influenced by the court’s view that television was not in existence in 1936 and that it would be unfair to Ettore to assume that Ettore was aware of this experimental medium.  The court was troubled by the lack of an express reservation of rights by Ettore, but finally decided that silence about an unknown media was the equivalent of a “reservation of rights.”[14]

The First Circuit adopted a similar rule in the “Curious George” case.[15]  The case involved a complex set of agreements to exploit the “Curious George” character.  A dispute arose regarding the scope of the license for the 104 film episodes of “Curious George.”  The license granted was “for television viewing” and Mr. Rey, owner of the copyright in the “Curious George” character, sued the distributor for distribution of the film episodes in video cassette form.  The First Circuit confirmed a district court ruling that “reference to television viewing . . . in a licensing agreement . . . does not include [video technology] . . . which probably was not in existence at the time that the rights were given.”[16]  The court noted that the current technology permits the viewing of video cassettes on monitors and other “non-television” devices.[17]

These results can also be altered by the language of the contract.  “Reservation of rights” provisions can be especially important.  For example, a dispute over the television film rights to the “Hopalong Cassidy” books turned on the wording of the reservation of rights.[18]  In 1935, the author granted a film studio all motion picture rights in his books.  The grant of rights was as follows: “rights to produce, transmit, reproduce, distribute, exhibit and exploit in any manner or method or device (except as hereinafter specified) now known or hereafter known or used”.[19]  This broad grant of rights was modified by a reservation of rights which stated that the author retained rights to “all television, broadcasting and radio rights.”[20]  In 1975, the successor to the original film studio tried to license the motion pictures for broadcast on television.  The estate of the author sued, claiming that the reservation of “all” television broadcasting rights prohibited such broadcast.  The court found for the author’s estate on the basis that the reservation of “all” television rights would not permit such a broadcast.  The court noted that, the broad grant of rights was modified by the parenthetical “except as hereinafter specified.”

The language of license grant itself is of critical importance.  Warner Brothers learned the importance of such a broad grant in a dispute over whether a license to make movies from a play granted during the silent film era included the right to make “talkies.”[21]  The grant of rights stated that Warner Brothers received the “exclusive, complete and entire motion picture rights”.  Murphy, the owner of the copyright in the play asserted that film industry divided the grant of motion picture rights at the time of the license into three separate set of rights:  (1) ”motion picture rights” (the right to use literary or dramatic compositions in motion pictures); (2) ”sound rights” (the right to use sound effects in connection with the use of literary or dramatic composition produced in the form of motion pictures); (3) ”dialogue rights” (the right to use speech and dialogue in connection with literary or dramatic compositions produced in the form of “talking” motion pictures).  The court rejected this assertion on the basis that the grant of rights for “entire” motion picture rights included all three of the rights.  The court also noted that the grantor had expressly reserved “reproduction of sound by radio” which suggested that the motion picture rights included dialogue rights.[22]

In another case, a broad license grant permitted summary judgment.  The lawsuit was a class action led by Mickey Rooney against the major motion picture producers and distributors claiming that they were not paying him for his publicity rights when exhibiting films.[23]  A typical rights grant to the studios was as follows:

“We [MGM] shall have the right to photograph you [Rooney] and your performances and thereby or otherwise to reproduce your likeness and any and all of your acts, poses, plays and appearances of any and all kinds hereunder, by any present and future methods or means, and the right to record your voice and all instrumental, musical and other sound effects produced by you hereunder, and to reproduce and/or transmit the same, either separately or in conjunction with such acts, poses, plays and appearances as aforesaid, as we may desire.  We (and our successors and assigns) shall be entitled to and shall own solely, exclusively and perpetually, all rights of every kind in and to all of the foregoing, and in and to all other results or proceeds of your services hereunder, without restriction or limitation of any kind, including (but not limited to) the sole, exclusive and perpetual right to reproduce and rerecord all or any of said photographs, reproductions and recordations, by any present or future methods or means, and to perform, exhibit and reproduce said photographs, recordings and reproductions or any of them at any time or times, either separately or in combination, in and in connection with said photoplay and otherwise, and in combination with photographs, recordations and reproductions of or made by any other person or persons.  You hereby transfer and assign to us all of the results and proceeds of your services hereunder, and all rights therein, including but not limited to, the rights specified above, without reservation, condition or limitation of any kind.”[24]

The complaint was dismissed on the basis that Rooney had assigned rights for publicity rights in those films to the film studios.  The court was strongly influenced by the breadth of the rights grant.

Another potential aid to the interpretation of these agreements is industry practice at the time.  However, as the Murphy case suggests, the determination of industry practice may be difficult.  Time Warner discovered this problem in its dispute with Subafilms over the right to distribute the Beatles’ movie “Yellow Submarine” in video cassette form.[25]  Although Time Warner acknowledged that the parties had deleted references to “non-theatrical” rights in the original agreement, Time Warner argued that this change did not effect its rights to distribute the movie in video cassette form because that medium was a completely new one.  Instead, Time Warner relied on a very broad “future technology” clause:  “the right to project, exhibit, reproduce, transmit and perform the Picture and prints and trailers thereof by television and by any other technological, mechanical, or electronic means, method or device now known or hereafter conceived or created.”[26]  The Special Master, however, rejected this argument and the Ninth Circuit Court of Appeals agreed.  Instead, he found that the parties had agreed to split new technologies along “theatrical” and “non-theatrical” lines.  Consequently, Time Warner did not have the right to distribute the movie video cassette form.

These issues may effect the price of the rights as well as the ability to grant them.  For example, even if a “contract” owner has the right to grant a license, he may be liable for third parties other than the contract “owner.”  This issue arose in the interpretation of the agreement between Peggy Lee and Walt Disney Studios about the use of her performance of the voices and music in the sound track for the motion picture “The Lady and the Tramp”.[27]  The agreement provided for royalties to Peggy Lee for all “records and transcriptions” of the sound track for the animated film.  Although video cassettes did not exist in 1952, Peggy Lee contended that the word “transcriptions” in the contract required the payment of royalties on video cassette sales.  The court agreed and she was awarded $2.3 million in damages.

A similar problem arose about “new media” in a dispute between the publishing house of Simon & Schuster and the film maker Quintex Entertainment, Inc. over certain rights to Lonesome Dove.[28]  Simon & Schuster, which is one the largest publishing houses in the United States, obtained the exclusive right to “publish” Lonesome Dove from Larry McMurtry.  However, Larry McMurtry had retained the motion picture, educational picture and television picture rights.  He licensed the motion picture rights to Quintex which produced a well‑known mini‑series based on the book.

The Simon & Schuster contract included an “electronic rights” clause which was very broadly drafted to cover exploitation of Lonesome Dove in all types of media.  A dispute then arose over Quintex’s attempt to distribute an audio cassette of the sound track of the mini‑series.  Simon & Schuster objected to this distribution as being beyond the scope of Quintex’s license to the “movie rights.”  Despite the planning and sophistication of a major publisher such as Simon & Schuster, they did not foresee all of the potential “spinoff” products arising from the novel Lonesome Dove.  The dispute was settled in on undisclosed terms.

The multi‑party cases arising from Disney’s distribution of “Fantasia” on video illustrate the application of these principles.  In Muller v. Walt Disney Co.,[29] the plaintiff, heir to the composer Leopold Stokowski, sued the Disney Co., claiming that he was owed a portion of the home video sales generated by the 1991 release of “Fantasia.”  In a 1939 contract between Mr. Stokowski and Disney, the former agreed to arrange “The Sorcerer’s Apprentice” for the film and to conduct the Philadelphia Orchestra for the recording of “The Sorcerer’s Apprentice” for the film.

The case turned on the language of the license grant, which included a very broad future-technologies clause.  The agreement between the two parties defined the term “photoplay” broadly:

“The term ‘photoplay’ or its equivalent as used herein, shall be deemed to include, but not be limited to a motion picture production, produced and/or exhibited with or accompanied by sound and/or reproducing and/or transmitting devices, radio devices, television and all other improvements and devices which are now or hereafter may be used in connection with the production, exhibition and/or transmission of any present or future kind of motion picture production.”[30]

Disney also retained very broad rights in the photoplay:  It “had the sole charge and control of the manner in which, and the terms upon which said photoplay shall be distributed, exploited [sic] and/or exhibited and the ownership of all rights in connection with said photoplay shall belong to [Disney].”[31]  The agreement also provided in Sec. 12, however, that Mr. Stokowski would be the owner of all rights in the arrangements and orchestrations of “The Sorcerer’s Apprentice” but granted Disney a 10-year exclusive (and thereafter non-exclusive) license to use them in the photoplay for use for “motion pictures and television purposes.”[32]

Summary judgment turned on interpretation of the word “photoplay” and whether home video distribution fell within the contract’s definition of “motion picture and television purposes.”  The court emphasized the language “all other improvements and devices which are now or hereafter may be used in connection with the production, exhibition and/or transmission of any present or future kind of motion picture production.”[33]  The court held that this included future methods of displaying movies to consumers, in public or private.[34]

The court was so mesmerized by the breadth of the definition of photoplay that it dismissed references to Sec. 12 and the limitations in that license by stating that the ownership of such rights was a “distinction without a difference, since the instant lawsuit is about home video, rather than arrangements and orchestrations.”[35]  This sentence demonstrates the court’s analytical confusion because the scope of the license, not the breadth of the definition of photoplay, should have been the focus of the analysis.

“The Sorcerer’s Apprentice” was in the public domain, and only the arrangements and orchestration were protectable.  In this case, the breadth of the definition of “photoplay” is offset by the limitation of the use of the protectable “arrangements and orchestrations,” the copyright for which was owned by Mr. Stokowski, in the photoplay for “television and motion picture purposes.”[36]

As an afterthought, the court did address the scope of the license by stating that the cases cited by the plaintiff were not on point because the contracts in question had not included future-technologies clauses.[37]  This case demonstrates that the license language, particularly if it includes a future-technologies clause, is a critical factor in a court’s analysis.

In fact, the breadth of the definition of photoplay was so compelling that the court decided the second challenge to the distribution of “Fantasia” on videocassette, even though the term “photoplay” was not used in the agreement.  In Philadelphia Orchestra Ass’n v. Walt Disney Co.,[38] the plaintiff argued that Disney was not licensed to sell copies of the orchestra’s performance in “Fantasia” in home video format but, rather, only for “feature pictures.”

The orchestra argued that the contract term “feature picture” meant “a feature-length theatrical motion picture intended to be exhibited in theaters outside the home.”[39]  The court rejected this definition, citing other cases that did not limit feature films to a medium or venue for exhibition.  Instead, because the feature picture was not defined in the orchestra’s contract with Disney, the court examined the related agreement between Mr. Stokowski and Disney to understand how Disney understood the word “feature.”

Citing Bartsch, the court found that the orchestra, the party granting the rights, should have the responsibility to ensure clarity of terms in the contract.  Thus, because the clause was broadly worded, the court found that the contract could not be read to exclude the presentation of “Fantasia” in the video format.  The court supplemented its decision by noting that motion pictures were available for rental to exhibit at home, so that the use of technology was contemplated at the time of agreement.

In the most recent decision in the “Fantasia” series, Boosey & Hawkes Music Publishers, Ltd. v. Walt Disney Co.,[40] B&H, the assignee of Igor Stravinsky’s copyright for “The Rite of Spring,” claimed that Disney’s license did not authorize the foreign distribution of “Fantasia” in videocassette format.  “The Rite of Spring” is in the public domain in the United States.

The license grant at the heart of the dispute stated “the nonexclusive, irrevocable right, license, privilege and authority to record in any manner, medium or form and to license the performance of, the musical composition.”[41]  The agreement, however, also limited Disney’s license to “the use of the musical composition in synchronism or timed-relation with the motion picture.”[42]

Furthermore, a condition of the license required performance of the musical composition in theaters that have valid licenses from the American Society of Composers, Authors and Publishers, or ASCAP.  The agreement did not include a “future-technologies” clause, and Mr. Stravinsky, in the agreement, did reserve all rights not granted under the license.

Both the district court and the 2d Circuit viewed this issue of contract interpretation as having two elements: whether the 1939 contract allowed Disney to use Mr. Stravinsky’s work in videocassette format, and whether the ASCAP clause prevented Disney from distributing Stravinsky’s work in a videocassette format for home use.

On the first issue, the 2d Circuit upheld the district court’s finding that the license permitted Disney to use “The Rite of Spring” in “Fantasia” in videocassette format.  B&H had contended that the license to use Mr. Stravinsky’s work in a “motion picture” format limited Disney’s rights, particularly in the absence of an express provision for future technologies and Stravinsky’s express reservation of rights.

The court relied on Bartsch to find that Mr. Stravinsky, as the grantor, had not met his burden of framing limitations on the license grant.  Thus, the court held that the license “to record in any manner, medium or form” reasonably included videocassette recordings and that grant of a “motion picture” reproduction right should include the video format unless there is a specific indication in the contract to the contrary.[43]

Furthermore, the court noted Disney’s unrefuted offer of evidence suggesting that there was a “nascent market” for home viewing of movies by 1939 and held that the foreseeability of new channels of distribution at the time of contracting might be considered in determining whether a license includes a new use.[44]

The 2d Circuit took particular care to note that the Bartsch rule did not prejudice copyright owners, although they frequently are copyright licensors.  Rather, the court stated that Bartsch stood for implementation of “neutral principles of contract interpretation” and that the contract language should govern.

In this context, its treatment of the second issue is difficult to understand.  The district court had found that the ASCAP provision prevented distribution of “Fantasia” on videocassettes because they would not be shown in theaters licensed by ASCAP.  The effect of the ASCAP provision is complicated because such provisions were later found to be unenforceable for antitrust reasons.  In addition, the provision had limited impact in the United States because “The Rite of Spring” was in the public domain.

The district court was concerned that such provisions might be found unenforceable in the 18 countries other than the United States in which B&H was attempting to obtain damages.  It found, however, that the ASCAP provision prevented distribution of “Fantasia” on videocassette directly to consumers in countries in which it was protected by copyright.

The 2d Circuit reversed the district court’s decision and remanded for further proceedings.  It found the evidence less clear, particularly because the work was in the public domain in the United States.  It noted that the ASCAP provision was ambiguous and probably “boilerplate.”  It even noted that “it is arguable that because the condition applied only to something Disney had the right to do without Stravinsky’s permission, the ASCAP Condition had no functional significance.”[45]

Ironically, the 2d Circuit cited “Kohn on Music Licensing” for the proposition that the ASCAP clause was “boilerplate” until the 1950s,[46] yet it ignored Kohn’s statement several pages later that the ASCAP clause was meant by music publishers to ensure that they received additional revenues through performance royalties from ASCAP.[47]  The court acknowledged the existence of a reservation-of-rights clause but dismissed its significance as merely duplicative.  It also dismissed the absence of a future technologies clause as unimportant.[48]

The dismissal of the reservation-of-rights clause is unusual.  Many other courts have found the existence of “reservation-of-rights” provisions especially important.  For example, a dispute over the television film rights to the Hopalong Cassidy books turned on the wording of the reservation of rights.[49]

In 1935, the author granted a film studio all motion picture rights in his books.  The grant of rights was stated as:  “rights to produce, transmit, reproduce, distribute, exhibit and exploit in any manner or method or device (except as hereinafter specified) now known or hereafter known or used.”  This broad grant of rights was modified by a reservation of rights that stated that the author retained rights to “all television, broadcasting and radio rights.”  In 1975, the successor to the original film studio tried to license the motion pictures for TV broadcast.

The estate of the author sued, claiming that the reservation of “all” TV broadcasting rights prohibited such broadcast.  The court agreed, noting that the broad grant of rights was modified by the parenthetical “except as hereinafter specified.”

Conclusion

The legal clearance of rights for traditional media on the Internet poses many challenges for existing works.  The lawyer faced with these issues needs to be sensitive to the practices of different industries whose rights he is trying to clear

Before using licensed works online or in other new media, the licensee should carefully review its rights in its license.  The interpretation of the scope of the right to use the work online and in the new media depends first upon the wording of the license grant and the context of that grant.  The licensee then should look to the existence of a future-technologies clause, which would broaden the scope of the license, and a reservation-of-rights clause, which would narrow the license’s scope.

To avoid these ambiguities in the scope of licenses to works in the future, a licensee should include very broad language in such licenses, such as “by any and all means, method, processes, whether now or hereafter developed.”  The licensee should also be careful in permitting future licenses to use terms such as “all” or “entire” in reservations of rights by the licensor.  On the other hand, content owners - licensors - should be careful to grant licenses of carefully limited scope, avoid future technologies clauses and use specific reservation-of-rights provisions to avoid overly broad interpretations of license grants in the future.

The ability to use existing licensed works in online and other new media is likely, as in the past, to result in disputes between copyright owners and licensees.  The history of copyright law, however, provides guidance in interpreting the scope of license agreements for uses in such new media.



[1]           Boosey & Hawkes Music Publishers Ltd. v. Walt Disney Co., 934 F.Supp. 119 (S.D.N.Y. 1996), aff’d in part, rev’d in part, 145 F.3d 481 (2d Cir. 1998), on remand 53 U.S.P.Q. 2d 2021 (S.D.N.Y. 2000); Philadelphia Orchestra Associations v. Walt Disney Co., 821 F.Supp. 341 (E.D. Pa 1993); Muller v. Walt Disney Co., 871 F.Supp. 678 (S.D.N.Y. 1994).

[2]           Tasini v. The New York Times Co., 972 F.Supp. 804 (S.D.N.Y. 1997) rev’d 206 F3d 161 (2nd Cir. 2000).

[3]           Del Greco, “Prior Licenses and New Uses:  Peggy Lee v. Walt Disney Productions and the Conflict between Motion Picture Licenses and Home Video Markets” 1992-93 Entertainment Publishing and the Arts Handbook 273.

[4]           UCC § 2‑312.  Dolori Fabrics, Inc. v. Limited, Inc., 662 F.Supp. 1347 (S.D.N.Y. 1987).

[5]           Nimmer at § 10.10(B) at 10‑92 (1993).

[6]           Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150 (2nd Cir. 1968) cert. denied 393 U.S. 826 (1968).

[7]           Id. at 152.

[8]           Id. at 153.

[9]           Id.

[10]          Id. at 154.

[11]          Kirke La Shelle Co. v. Paul Armstrong Co., 263 NY 79 (1933).

[12]          Ettore v. Philco Television Broadcasting Corp., 229 F.2d 481, cert. denied, 351 U.S. 926 (1956).

[13]          Id. at 491.

[14]          Id.

[15]          Rey v. Lafferty, 990 F.2d 1379 (1st Cir.), cert. denied 114 S.Ct. 94 (1993).

[16]          Id. at 1387.

[17]          Id. at 1390.

[18]          Filmvideo Releasing Corp. v. Hastings, 446 F.Supp. 725 (S.D.N.Y. 1978).

[19]          Id. at 726.

[20]          Id.

[21]          Murphy v. Warner Brothers Pictures, Inc., 112 F.2d 746 (9th Cir. 1940).

[22]          Id. at 726.

[23]          Rooney v. Columbia Pictures, Industries, Inc., 538 F.Supp. 211 (S.D.N.Y. 1982) aff’d 714 F.2d 117 (2nd Cir. 1982), cert. denied 460 U.S. 1084 (1983).

[24]          Id. at 215.

[25]          Subafilms, Inc. v. MGM-Pathe Communications Co., 988 F.2d 122 (9th Cir. 1993) vacated in part 24 F. 3d 1088 (9th Cir 1994) cert. denied 513 U.S. 1001 (1994). 

[26]          Id. at 124.

[27]          Lee v. Walt Disney Co. (CA Super. Ct. No S039681).  Daily Variety “Just for Variety” December 21, 1992. 

[28]          Kirsh, “‘Lonesome Dove’ and the Electronic Rights Revolution in Book Publishing,” 43 Los Angeles Lawyer, April 1990, No. 2, at 24.

[29]          871 F.Supp. 678 (S.D.N.Y. 1994).

[30]          Id. at 682.

[31]          Id. at 681.

[32]          Id. at 682.

[33]          Id. at 682.

[34]          Id.

[35]          Id.

[36]          Id.

[37]          Id.

[38]          821 F.Supp. 341 (E.D. Pa 1993).

[39]          Id. at 345.

[40]          145 F.3d 481 (2d Cir. 1998).

[41]          Id. at 484.

[42]          Id.

[43]          Id. at 486.

[44]          Id.

[45]          Id. at 490-91.

[46]          Id.

[47]          Al Kohn & Bob Kohn, Kohn on Music Licensing 851-52 (2d ed. 1996).  Kohn did note that the scope of this type of license was ambiguous.  Id. at 839-40.

[48]          145 F.3d at 488.

[49]          Filmvideo Releasing Corp. v. Hastings, 446 F.Supp. 725 (S.D.N.Y. 1978).


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