Dear Rich: Nolo’s Patent, Copyright & Trademark Blog

Dear Rich: I'm optioning theatrical rights from an author's heirs. I'm using a boilerplate option contract to option the rights. Before I enter into the contract, should the heirs have to provide right of title from the Copyright Office and proof of ownership? We don't know what language is included in your option agreement -- the Dear Rich Staff finds 'boilerplate' to be a deceptive term (with even more deceptive origins). However, you're on the right track by wanting some form of assurance or verification.

Dear Rich: I have read your book, Music Law: How to Run Your Band's Business, but there is an issue that still confuses me. My bandmates and I are at a loss as to how to divvy up the various possible income streams (MP3 sales, CD sales, TV sync license fees, and royalties, etc.). I am the sole songwriter in the band. We record music and are trying to market it through various means (online and brick and mortar). If there is no record company to take a share of sales income, how, generally, is that income split up? What about songwriter royalties and publisher's royalties? What about SoundExchange royalties? Who gets a cut when we sell something?  Any help you can give would be greatly appreciated. I'm so glad you asked. One simple way to look at things is to divide up the revenue sources into two groups: music publisher/songwriter income and band (or non-songwriter) income. Your band has a few choices for dealing with songwriter income (as discussed in the book). The main decision is whether the songwriter keeps it all, or divides it among band members -- for example, you can create a music publishing entity and split that income based on an agreed-upon percentage, perhaps rewarding the songwriters with a higher share of the pot. As for band (non-songwriter) income, that's usually split equally after deducting expenses and payments to the usual suspects (manager, tour manager, agent, etc.) In the new edition of Music Law, I'm going to break  down the sources of music income into more detail.  Since that won't be out until August 2009, the Dear Rich staff has prepared this table that summarizes the common income sources based on whether it is songwriter or non-songwriter income.

Dear Rich: I am a long-time artist, but never serious until now. I took up clay with lost wax in mind, and am now at the point of contacting a foundry to begin the process. What do I need to do and/or know prior to actually sending them any photos? I'm so glad you asked. The short answer to your question is "That depends..." The Dear Rich staff presumes you're concerned about either (1) the foundry ripping off your work, or (2) that the foundry will make some claim of co-authorship. As for being ripped off, as our Dear Rich readers know, you have a copyright in the photos (and any resulting sculpture) without doing anything. You can file a copyright application if you like (we recommend the new Form CO) and that will provide additional rights in the event of an infringement. You could also have the foundry sign an agreement (PDF) not to disclose or reproduce your work. That agreement could also deal with your second issue by having the foundry acknowledge that it acquires no rights in the resulting sculpture (and any rights it does acquire are assigned to you). (This site has helpful information about dealing with foundries.) Our guess is that the foundry is used to artists raising such issues and may even have such an agreement available. If they don't (and the agreement cited above doesn't work), you can put together an informal agreement yourself, or get one from one of Nolo's independent contractor books. All of these suggestions are based on the assumption the foundry is in the U.S. If it's in a foreign nation, you'll have a harder time enforcing agreements and copyright.

Dear Rich: Who owns the rights to software that is developed voluntarily and during one's own free time (after work hours) but who offers use of the software to his employer? I'm so glad you asked. As a general rule, if the software is not something you would create in the course of your employment and you created it on your own time, using your own equipment, then you own it. If you let your employer use it, then you have granted a non-exclusive implied license. To get a more comprehensive answer, the Dear Rich staff would need to know:

• Did you create the software at work (or using work equipment)?
  
• Does the software use code or trade secrets owned by or developed for your employer?
  
• Did you sign an employment agreement that discusses ownership of employee creations?
  
• Does your employee handbook at work have rules regarding employee-created innovations?

If the answers are all, "No," then you own the rights. If you answered "Yes" to some or all of the questions, you may still own the rights but you will need to sort out some murkier issues. You can find an explanation for all these principles in my book, Profit From Your Idea. (Try searching inside the book using Google Book Search). Keep in mind that even if your employer owned the rights, you might still be able to earn revenue from the software.

Dear Rich: A former co-worker developed a new business idea. I signed an NDA and we both worked on commercializing the idea and planned to form a startup. He lost interest. An attorney reviewed the now-expired NDA and said I was fine to pursue the idea on my own, that I was under no obligation by the NDA. Can I file a provisional patent on the business idea? I would like to protect the idea by fixing a date in case I decide to file a formal patent application within the year. Any thoughts? Our first thought is that since you mentioned that you've already hired an attorney, why not ask your attorney whether to file? The Dear Rich staff provides helpful information, but your attorney knows more details about your case and could provide specific, client-centric advice (and probably has malpractice insurance to boot). Our second thought is that there is no such thing as a "provisional patent" (a common misconception). There is only a provisional patent application (or PPA) -- a document that establishes an official U.S. patent application filing date. (Nolo offers a free guide to PPAs that you can download here.) 

As for filing your PPA with the USPTO, the PPA must be filed in the name of the inventor (or a co-inventor). A co-inventor is someone who contributes at least one novel and non-obvious concept that makes the invention patentable. If you didn't add anything patentable to the concept -- no Eureka! moments -- the PPA must be filed in the name of your co-worker. As for preserving the date of invention, you don't need a PPA to do so. Many inventors preserve their dates via an inventor's notebook. The important thing to keep in mind is that if you publicize or commercialize the idea, a patent application would have to be filed within one year in order to preserve patent rights. One way to avoid potential hassles is to work out a joint-ownership agreement with your former co-worker that will provide you with the right to exploit the idea while compensating him.

Dear Rich: If two songwriters collaborate and co-own their copyright in a song, can one writer issue a license for the whole song (assuming she accounts to the other for her share)? What if the other writer believes that the song was licensed for less than the prevailing market rate for that use? Can that writer sue the co-writer for destroying the value of the copyright? I'm so glad you asked. As to your first question, the co-owners share the legal rights to the song (assuming there is no agreement to the contrary). As joint copyright owners, each writer can separately grant permission (a license) for someone to use the song, provided that each writer shares the income with the others. Although each co-owner is entitled to receive money from the song, this doesn't mean that the two writers have to share money from the song equally. One writer may receive 30% of the income and the other may earn 70%. Each writer's share is usually based on the value of their contribution. This is a matter that is agreed on by the two writers. If the writers do not agree and the issue turns into a lawsuit, then a court will decide on the value of each writer's contribution. Courts often start with the presumption that all songwriters contributed equally.

As to your second question -- whether one writer can sue the other for licensing the song at less than market value -- we believe that it will be difficult to successfully assert this claim. Copyright expert Melville Nimmer reportedly argued that a co-owner has a duty not to "waste" a copyright. (This concept is borrowed from real property law in which a life tenant has a duty not to injure or waste the property.) However, our nation's leading copyright expert does not believe that a co-owner can assert this kind of claim. Even if you could make such a claim, keep in mind that you will have a heavy burden demonstrating that the value of the copyright has been depleted.

The Dear Rich staff believes there may be one caveat to these rules and that is if one songwriter licenses the first use of a song without the consent of the co-writer. Although copyright law does not explicitly require all writers to consent to the first recording, we believe that this approach is required because after the first recording, this first use triggers the rights of others to record the song under compulsory license rules.

(P.S. Here are some additional tips for songwriters.)

Dear Rich: I have a question. I am a science journalist and I've recorded interviews with many famous scientists. I've used this material in books and articles and would now like to use these on a website for free, open-access listening. Someone has suggested that I obtain permissions from all my subjects or their estates. I believe that no permissions are required because the subjects implicitly granted me permission to use the interview material as I saw fit when they sat down with me and my tape recorder and pad. I'm so glad you asked. You are navigating through one of the grayer areas of copyright law so in answering, I'll have to use a lot of equivocating language, such as 'likely,' 'may,' and 'probably.' If you don't have time to read all of that stuff, the bottom line is that you are probably okay to do what you plan to do. The courts and legal scholars are not a beacon of clarity when it comes to divvying up the rights for interviews.

From the limited case law available, it's likely that a court will consider an interview to consist of two separate works: one work created by the interviewer's questions, and the other created by the subject's responses. These works may be protected under traditional copyright principles (or they may be protected under what's referred to as common law copyright). Under that 'two-separate works' approach, you'd need permission to reproduce the subject's answers. That permission may be implied by the subject's consent to the interview. In fact, one court -- dealing with an interview with Ernest Hemingway -- hinted that Hemingway's failure to limit usage at the time of the interview implied unlimited use.

Some legal scholars argue that a better approach is that the interviewer and subject jointly create one work. Under that analysis, the interviewer and the subject are joint authors. In that case, either author can use the interview for any purpose provided that the party using the interview accounts to the other for any profits. If this approach were applied to your case, your use should be fine since you are distributing the interviews for free and (assuming you are not making money off the website) no accounting would be necessary. You can read more on these two approaches at the Publaw.com site. Also, as you are probably aware, if you proceed without permission, you would have a strong fair use argument for distributing these interviews based on their historic and scientific value.

The whole thing becomes more complicated if you are making money from the sale or licensing of the recordings -- a situation that may trigger a right of publicity claim or (if you and the subject are considered joint authors) an accounting of moneys earned to the interview subject. Finally, there is some question as to whether federal copyright protection extends to a recorded interview, since simultaneous recording of the performance of a work of authorship (that is, not being broadcast) is not considered to be fixed. That means that the interview is not protectable under copyright law (hence the need to use common law copyright, as described above). There's no guarantee that this will all play out as described. A lawyer would advise you that the only 100% safe course is to obtain permissions. But I think your chances of avoiding hassles are good and I personally look forward to listening to the interviews. There is always so much to learn about our scientific heroes.