(Second Edition)

Kenneth L. Port,  Jay Dratler, Jr.,  Faye M. Hammersley, Esq.,  Terence P. McElwee,
Charles R. McManis, and Barbara A. Wrigley

On-Line Problem Supplement
Copyright © 2005   Carolina Academic Press.   For permission, see CMI.

Chapter 6

Exercise 2:  Ownership of Multimedia Productions

You have been retained by Alan Able, a young multimedia entrepreneur and up-and-coming wheeler-dealer.  For six months, he and his friends Betty Best and Carol Carruthers have worked on a multimedia production recapping, satirizing, and commenting on the controversial Bush-Gore presidential election campaign of 2000.

The raw material for their production came from four sources.  First, Alan and Betty, each of whom has substantial filming experience, videotaped a number of their own video interviews with prominent figures in that campaign, including campaign advisors, news commentators, and state and local political officials.  During these interviews, Alan and Betty posed original questions of their own.  Second, both Alan and Betty have large collections of "clips" of political commentary, political ads of both candidates, and news analysis.  They got these clips from their own off-the-air recordings of live television and radio programs and from their own digital recordings of "streaming video" from various Websites.  Third, Alan and Betty also have large collections of textual comments, both serious and funny, which they copied from others' newspapers, magazines, Web logs ("blogs"), and various on-line bulletin boards.  Finally, Carol, the computer expert of the three, has used her computer to copy short segments of various digitized popular songs, some of which she got through Napster by file "sharing," and others of which she got from songs she downloaded from Apple's iTunes website, after paying 99 cents per song.

Adam, Betty, and Carol each edited the materials that each respectively collected.  Each of them then selected various cuts and clips.  Then Adam and Betty worked together for three weeks at Adam's home to weave the selected cuts together into a coherent "story."  During the last two weeks, Carol wrote an original computer program that allows a viewer to: (1) select whether he or she wants to view the production from the perspective of a Democrat or a Republican; and (2), at a number of times during the production, to influence what segments will subsequently be performed by stating how interesting and/or funny the viewer thinks the current segment was.  Working at her home, Carol has put together all the segments and clips that Alan and Betty selected, in the order they suggested, into a coherent set of segments that interacts with her computer program.  Finally, Carol combined her computer program with those segments and clips on a single CD, which automatically begins operation upon insertion into a standard CD drive of any Windows computer.

In all of this work, Alan, Betty, and Carol worked at their own homes, using their own video equipment and computers.  All three have full-time "day jobs" that have nothing to do with multimedia.  None of the three has been paid anything—even expenses—so far for this work.  Alan has orally promised Betty and Carol to split any profits from the work in the ratio 60% for him, and 20% each for Betty and Carol, but there is nothing in writing.

You have reviewed the multimedia production and have found it extremely clever, insightful, and, at times, uproariously funny.  You also noted numerous segments and clips which you strongly suspect are subject to others' copyrights and perhaps rights of privacy and/or publicity.  Alan has just formed a limited liability company to commercially exploit and disseminate the production over the Internet and through the sale of CDs.  He is about to ask for substantial investment in that company, and he has asked you to make sure the company has "all the legal rights" required.  Write a memo to Alan advising him what he and the company should do to insure that the company has the necessary ownership and rights to do what it proposes to do.  Alan has asked that your memo not exceed 650 words.

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