Clearance of Rights Basics

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There Ought to Be a Law™

Clearance of Rights Basics™

When one embarks on an multimedia or entertainment project, a film, book, or any other work that might contain I.P. one must obey the copyright law (see Copyright Basics), Trademark Law (see TM Basics), the laws of right to privacy and right of publicity. The copyright law states that if one uses another's works a royalty needs to be paid to the author. Thus in a multimedia project, you want to include film footage, photographs, music and text elements, along with the software "engines" that allow movement, animation, game play, characters and other elements. All these elements are subject to potential license, unless you create new and original materials. Trademark law dictates that use of another's trademark is an infringement, whether on a web site or a toy. Patent law applies to prevent another from practicing the invention of the inventor without a license. All the vast array of property rights in any such project needs licensing or other preferably written permission to use it.

It is the licensing of these elements that makes the stuff of Clearance of Rights. Clearance really means that you have obtained the all the rights to all the elements of a project. This puts at ease investors and shareholders who have invested time and money in the project. It lessens the budget overall because insurance premiums on the project will be lower, since the potential for litigation is lessened and the gain in respect to the project will make it worth more. A benefit of proper and thorough clearance is that bigger stars, better artists and performers can be "available" rather than "not interested."

How does one get proper and thorough clearance? You must seek the permission of the owner(s) of these materials. The best permission, a written license, is obtained by contacting the owner. The owner is found by reference to several clues. These include copyright notice on an item of music, text photo, image, work of art or other copyrightable matter. Music has several elements; the performance itself may be a separate copyright than the underlying musical composition, so caution is necessary here. Owners of music are called publishers, and the rights to music are perhaps the most complex of all and may include permissions from the recording artists, album cover photographer, publisher, record company, ASCAP, BMI or other "performance" right society and the Harry Fox and other agencies who may handle one or more of these rights. Trademark searches will indicate who owns or claims names trademarks, service marks, logos and names. Some fictitious characters or famous real people may also be or own registered trademarks. There are also "common law" name searches that can be done to locate names of goods, services and other names. Titles of copyrighted works may not generally be themselves copyrights but could be trademarks.

As a practical matter, once the owner of an element of a project is known, you must then be able to convince them to license the material to you for use in your project. This can be easy or tricky, and you MUST take no for an answer, or face violations of state and federal laws, not to mention the laws of many countries. For example, if you have a Multimedia project involving adult material, it could be difficult to get agreement to license, say, Donald Duck from Disney; or Barbie but it may be less difficult if the project is a comical child's fantasy game, toy or something the licensor deems acceptable or even delightful.

Generally the license agreements contain the following variable terms:


1.   Term (time of the agreement)
2.   Territory:
     a.   Note that the Internet is considered the "universe" 
          and might be too broad for may licensees.
3.   Formats:
     a.   Usually this is "in all formats now known or hereafter
          invented" if you're the rights buyer and..
     b.   "In CD-ROM only" or other restrictive rights if you're
          the seller.
4.   The Rights Granted:
     a.   This includes the details of the exact materials,
     b.   The ways the materials must be used or applied,
     c.   The limitations on use of the materials
          i.   Typically this includes limits on whether or not
               they may be used for gambling for example.
	ii. The quality of the end product and how the licensed materials are used.
5.   The Royalty rates and conditions:
     a.   Amounts and how they are calculated.
     b.   Accounting, reporting and payment.
6.   Representations and warranties:
     a.   Including that both parties have the rights they
          exchange or grant,
     b.   That there are not conflicting agreements and no other
          barriers to either,
     c.   That insurance, indemnities and damages are provided
          for, and
7.   Other rights and terms tailored to each specific project and I.P.

Your best bet is the careful attention of an attorney knowledgeable in I.P. to help.  
"Clearance" organizations are also available as are many societies such as
the Authors Guild.  Please review carefully any agreement and never sign an agreement
without review of counsel.

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