No one enjoys clearing rights. Checking that you may use content (whether on your Web site, in a publication, or for a performance) and won't be sued over it takes time and effort. And, for e-commerce counsel clients, that means more money.
There Are Rules
The rules governing content use have always been complex, long before the Internet. For instance, different types of intangible rights must be obtained, even for the same song or image ' not only familiar rights such as:
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Text;
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Images;
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Photographs;
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Music; and
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Trademarks.
There are also hybrids when one type of right is embedded in another type, such as a photograph that includes a trademark. And additional rights must be obtained when images of individuals are included.
Even worse, owners of multiple rights often must be identified ' and located, if they even can be found. For example, even if you want only to loop a few seconds of a single song, you need separate rights for:
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The lyrics;
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The score;
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A particular performance; and, today,
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Different types of recordings of that performance, as well as master rights of any music publishers.
e-Commerce Complicates the Regular Rules
Yet, applying those rules to using content on an e-commerce Web site is even more difficult because “commercial speech” remains an evolving area of the law. The legal rules for online content constantly evolve as copyright and other intellectual-property laws struggle to adjust “rights” to the stresses caused since digital technology redefined the many ways to “copy” content. For example, something as simple as cutting and pasting a desirable image found online may run afoul not only of the owner of the image, but also of the Web site operator who did obtain the content-usage rights properly and paid for a license to use the content, and of the artist who created it. In e-commerce, too, the particular look of content is critically important to brand image and market impression, and some vendors spend heavily to create extremely high-quality images so that their content can be properly displayed online ' and therefore are prepared to spend heavily again to stop others from copying that image to sell similar or knockoff products.
But in trying to cut through all of this complexity, perhaps the legal rules of Web site design (at least in practice) become as simple as the schoolyard games that teach toddlers the importance of asking permission before acting, such as Mother May I? and Simon Says. In this changing technological and retailing landscape, Web designers must almost always be sure they have permission before using content, whether that content be:
(Editor's note: For a list of Web sites where one can request permission for a variety of content, see, ““Links to Help e-Commerce Players Identify Rights Owners and Clear Rights.” The list is not comprehensive, because there are too many possible rights owners from whom permission must be sought to cover all entities or people for every instance. A good basic resource on the mechanical process of clearing rights is Getting Permission: How to License & Clear Copyrighted Materials Online and Off, by Richard Stim, Esquire (Nolo Press, 2007).)
Of course, the same rules apply when publishing content offline, whether that content is to be published in a magazine, a book or video. But the convenience of right-clicking to copy and use electronic content seems to cause designers to forget that basic rule ' and to forget to check the terms and conditions of the Web site from which the content was obtained, to be certain that use is permitted. For example, see the restrictions of Corbis.com, a well-known stock photo site, at http://pro.corbisimages.com/creative/terms/content/EULAs/Certified_EULA_US.pdf, which clarify that it licenses images solely for a specific “End Use,” rather than for general publication or distribution. (Corbis.com, in contrast, also offers a “royalty free” license, but that applies only after payment of a flat fee, and then only for distribution to 10 or fewer users.) Obviously, these restrictions would not apply to content that the designer's firm already owns, either because it created it, employed the person who created it under a contract that assigned the rights to the content, or acquired or licensed it from a third party.
It's Not Always
Just Black and White
This “black and white” kindergarten rule to “ask first” has the advantage of simplicity ' either you have the rights, or you don't. If you don't have the rights, you can't use the content ' maybe. As with anything involving the law, there are gray areas, exceptions to complicate matters, when advance permission from the rights owner is not required. How else would attorneys remain fully employed?
For example, asking for permission isn't needed for content that the designer's firm already owns, either because it created it or because the firm employed the person who created it as mentioned earlier, such as under a contract that assigned the firm the rights to the content as a “work made for hire.” Similarly, no additional permission is needed for content properly acquired or licensed from a third party. Other content may be used freely ' and “for free” ' such as content that has gone into the public domain. That situation occurs when prior rights have lapsed, or the creator chooses to make them available for others' use. But be careful ' just as the law in general doesn't have a list of what you are permitted to do, there is no encyclopedia of public-domain works.
Other Means to an End
“Fair use” of another's content is also permitted, for “copying of copyrighted material done for a limited and 'transformative' purpose such as to comment upon, criticize or parody a copyrighted work.” (Editor's note: For an overview of fair use and for particulars of the doctrine and application of fair use pertaining to copyright and to fair use in U.S. trademark law, see, http://fairuse.stanford.edu/Copyright_and_Fair_Use_Overview/chapter9/9-a.html; http://en.wikipedia.org/wiki/Fair_use; and http://en.wikipedia.org/wiki/Fair_use_(U.S._trade mark_law)).
In the absence of black and white rules, often what is “fair” differs depending on whether one is the rights owner or the person trying to use them without paying for that privilege. Finally, if you can't find anyone from whom to seek permission to use a work, even if you know the identity of that person, you have (and may use) a so-called “orphan work” (see, http://en.wikipedia.org/wiki/Orphan_works), which is another common exception to the permission requirement (see, http://copyright.columbia.edu/orphan-works). Of course, unlike real children without parents, a work is an orphan only until its creator shows up, demanding royalties and damages. And it can be particularly frustrating when a particular work is desired, and you know the author, but can't locate the proper licensor ' as recently occurred to me when I tried to assist a small nonprofit with locating the owner of an image widely available online at print sales sites, but could not find the owner of the licensing rights.
In all those cases, unfortunately, the black and white permission requirement takes on a “touch of gray” (or “grey,” the alternative spelling that those alternatives, The Grateful Dead, used in their song “A Touch of Grey”; see, http://arts.ucsc.edu/Gdead/AGDL/touc.html). Instead of asking for permission in advance, the designer must try to “get by” by using the content without permission, but also without the certainty (and legal defense) that publishers prefer to have when using content. The clarity of prior permission provides the defense against claims of infringement from the rights owner, and all the costs that inevitably come with such a lawsuit.
Still, there are many reasons one might rationally prefer a “gray” solution, even if such an option is riskier than a clear black and white one. The first is easy to understand: Free usage, with acceptable risk, costs less than paying for permission. Even before the current recession, avoiding a cost has always been a step to profitability, and this is the case especially now as publishers strive to develop an economic model for survival against the widespread availability of free content online.
Moreover, the risk of using rights without permission when the law concerning them is ambiguous, such as under the fair-use and public-domain exceptions, may be preferable to risking rejection from the rights owner by asking for permission ' especially if the rights owner restricts use of its creations to avoid undesired association, whether to avoid damaging one's commercial value, or on the basis of political or ideological preference (see, www.cbsnews.com/stories/2006/02/26/sunday/main1346174.shtm). It may be a clich', but there is tremendous folk wisdom (and canny legal advice) in the expression, “Never ask the rabbi if it's kosher.”
Due Diligence in Clearing Rights
In addition, even if someone is willing to pay for proper content-use rights, it is not always easy to secure them. Cheryl Kreiner, the expert legal assistant in my office responsible for the often mechanical tasks of clearing rights, warns that it can frequently take a long time just to find the right person to ask, much less pose the correct question.
“Make sure you have enough time to get the license; you can't make this happen overnight, in a week or a month,” Kreiner says. “Too many people are involved, i.e., the songwriter(s), the artist, the record label, etc. Someone could be on vacation, on tour, or the responsibility for issuing the license could be delegated to someone new who doesn't know about you or your request. Keep in constant contact with everyone from whom you requested a license. And last, but not least, always keep your clients continuously informed regarding your progress” (or the lack of it, because of the very real possibility that when so many parties are involved, something will inevitably go askew).
Also, a party seeking rights permission must know precisely what use to request ' simply stating a request to use content in “e-commerce” leaves open many technical questions that will affect the type of rights that must be obtained, and the cost of obtaining those particular rights, not to mention the legal questions about the desired scope of use for the rights being sought. For example:
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Will music on a marketing Web site also be used in companion campaigns in traditional media or in other marketing channels?
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Will the site be available for a limited time only, or will it remain online indefinitely?
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Will it be promoted domestically, or to a broader, even worldwide, audience?
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Focusing on just the Web site, how long will it operate?
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Will it be linked to other sites where the content may be displayed?
A specific, fully explained request will generate a response much more quickly than a broad, general one.
Rights: A Deep Well
The multiplicity of rights for the same content also creates particular problems for designers creating content intended for use in multiple formats, as often occurs when creating a Web site that is part of a broader marketing campaign, and which is something in which e-commerce enterprises typically engage. As Kreiner notes, getting rights to music can involve the songwriter, the publisher, the performer, the record label and the owner of master rights to it all. Conceptual changes are easy to make for a single designer or marketer, but not if changing the Web site will require getting new or different rights; indeed, that will take more time than is available for the task. In fact, some previously obtained rights may no longer be accurate. Sometimes changes in the design will require people tasked with acquiring rights to seek entirely different rights, at potentially much different ' and greater ' cost. In the world of e-commerce, where changes can be published to the world seconds after they have been created, accommodating the timetables of the traditional licensing world will quickly clash with the work habits of those accustomed to immediate implementation ' especially, as Kreiner warns, if the people involved in scheduling steps in the e-commerce development process did not build in any time to hunt for rights owners.
Of course, not having time to clear rights is a better problem to have than the consequences of not paying attention to rights in the first place. A colleague once told me about a Web site that was created and used the music of a well-known performer. Senior executives loved the demo version, and asked how the rights had been obtained within the project's budget ' which of course the designers had never realized they had to secure. At that point, well into the time and expense allotted for the project, the developer had little alternative to trying to secure those rights, regardless of the cost, or other limits on use, because the rest of the development had proceeded past the point where it could be redone.
Another rights-clearing challenge created by e-commerce is a modern variation on the “round peg into a square hole” problem. Frequently, those involved in clearing rights are not e-commerce attorneys, or even e-commerce site developers; instead, the personnel at the rights-owner or clearinghouse agency may be lower-level clerks seeking to pigeonhole each rights request into an established slot. While some aspects of e-commerce may well employ traditional methods, others taking advantage of the possibility for innovation made possible by Internet technologies may truly be creating “new slots.” In that case, the request may be priced too high, or just delayed while the clearinghouse tries to set the correct rate, and by doing so, holding back the whole project.
Better Safe Than Out of Business
However, despite all of these ways around getting rights, most e-commerce firms will still pursue them, whenever possible, and not just because the lawyers want such work. (In fact, the high-level, time-sensitive, value-added work derived from defending an infringement injunction will almost always be far more profitable than the commodity work of routine advance licensing handled by legal assistants or clerical employees.) The upshot is that for a firm looking ahead to the long term, the risk of not getting rights, or relying on an aggressive interpretation of one of the doctrines described above, goes far beyond the relatively small cost of taking the content off the site upon receipt of a cease-and-desist letter. If the copyrighted content is tied into a broader campaign, and has been used in collateral materials, the idea of “relatively small cost” can take on a very real, very different, meaning and magnitude.
First, any lender or investor who looks at the site will certainly ask for a typical warranty that the owner has all rights to the content, and will inquire about for how long the rights have been secured. After all, why would a lender or investor risk a loan to a firm that does not have its marketing rights locked up indefinitely? Note, too, that this question would apply not just to content licensed from third parties, but also to “home-grown” content. As described above, content created by an independent contractor whose agreement did not properly assign rights to the work to the user will not satisfy the lender's attorney, who must evaluate the Web site as collateral (see, “Dressing Your e-Business Up For Success” in the June 2008 edition of e-Commerce Law & Strategy; subscribers can find it at www.ljnonline.com/issues/ljn_ecommerce/25_2/news/150577-1.html).
A potential investor will ask the same questions, because losing rights to use content could affect future earnings. However, a failure to obtain the correct rights the first time around not only calls into question the likelihood of getting the loan, but also the lender's evaluation of the prospective borrower's business skills for having made such a basic mistake. And the possibly doubt-fueled scrutiny may not end there. The same questions will be asked by most potential deal
partners. Who wants to buy into a site that has a latent lawsuit lurking in the background ' at least not without discounting the deal price by a multiple of the potential cost of the claim?
In all of these cases, therefore, the moral is clear: No matter how burdensome (or expensive or time-consuming) asking for rights may be, it will most likely be less than the cost of defending a rights-infringement action. Even worse, the entrepreneurs or established e-commerce venture may have to take down its site for repairs, with the attendant loss of business and costs of redesign, and the potentially devastating loss of goodwill (if any remains after the site must be changed under these circumstances).
Do It Right the First Time
So what can a Web site developer do to avoid all this aggravation? Certainly, as Kreiner's advice makes clear, most of the clearance process can't be avoided. Just as in the schoolyard games referred to earlier in this article, advancing without asking permission will get you sent back, but with far worse consequences for your business or career than being last in the lunch line or being called “out” in a no-venture no-gain child's game. Therefore, leave plenty of time for the research process, and exhaustively consider all of the rights needed. Fortunately, because rights clearing is often done by legal assistants or clerks, it may simply be cheaper to hire someone who does it every day. I could read a book on how to replace my brakes, but I wouldn't want to bet my life on my ability to follow the instructions ' nor should the principles and others in an e-commerce enterprise bet their professional life on how well they can handle what some people spend all their work time doing.
If you are designing a site from scratch, however, you can “pick your battles,” and choose only content for which you don't need rights, or rights you can obtain cheaply. There are many sites online promising royalty-free material. You can also plan to rely solely on creation of your own content (as long as you obtain full rights from the artist or creator). Again, be sure to read the licensing terms for clip art, whether on a disk or online; something that is free for personal use may bear a charge for commercial or mass use.
If you want to be more daring, orphan works are also available ' but be prepared to demonstrate the reasonableness of your search for the owner if its lawyer sends you a cease-and-desist letter. The lenders and investors mentioned earlier in this article won't be interested in your cost-benefit analysis if it proves to be wrong. The same balancing applies to what you believe to be in the public domain: in some fields, everything reasonably needed has gone into the public domain. And be even more careful when using images of persons, especially famous ones ' not only do they likely control contractual rights to use of their likeness, but common law also gives them rights to the exploitation of their persona.
The crux of it is that when planning an e-commerce Web site, you should apply to the current situation the lessons learned that you may have used with adaptation for the march of time, even if inherently, through your life since you were five years old (your kindergarten rules): Ask permission first, if you can get it; if you can't, then you must become familiar with the rules for living with “a touch of gray” that apply to instances in which you can use the content of another person without express prior permission. Because the Internet is not kindergarten (notwithstanding the kindergarten-like online behavior of many people), and, more often than not, with the help of those rules, “you will get by,” as the aforementioned song says.
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