Published Articles

June 7th, 2006

Who Owns Online Content and Who Should Own It - A Lawyer’s Thoughts on Five Online Content Scenarios

The combination of ubiquitous online social networking and Web 2.0 is fueling the latest online intellectual property confrontation between content companies and internet users. In an interesting twist, though, this time the content is being created by the internet users themselves.

On television, shows such as American Idol give anyone the opportunity to perform for the masses. But Idol, like most television, is controlled and managed by professional content creators and media companies – strict adherents to the conventional copyright exploitation and protection rules. On the other hand, youtube.com enables anyone to produce and distribute video content created and/or performed by them. And they have this ability without the approval of any gatekeeper, and with latitude to skirt or even ignore Copyright law.

So the battles continue as corporate content owners seek – largely unsuccessfully -- to prevent the unlicensed distribution of their content by internet users. Indeed, the corporate content owners are having the same lack of success the record companies had in their efforts to put the content back in the bottle. Witness Amazon’s intention to enter the online music distribution business with a model that eliminates the DRM layer (which had restricted purchasers’ ability to play the music on the player of their choice).

Today's battle isn’t exactly even-handed: Most Web 2.0 social networking sites require internet users to grant the website owner rights to use and reproduce their content. These website operators correctly point out that in order to provide their services users must grant them certain rights to reproduce and distribute their content. But many of these terms of use go beyond what is needed to operate the website, including in some cases the right to create derivative works and to distribute those derivative works in any medium not existing or hereinafter created. The result is a tense new world where 57% of senior media and entertainment executives in North America and Europe identify the rapid growth of user-generated content as one of the top three challenges they face, according to a survey by Accenture reported in the Hollywood Reporter (May 1st).

As video editing, web publishing, and other computer functions migrate to the web, more and more digital content is finding that a stop on a Web 2.0 site is inevitable. What does this mean for the future of ownership of this content? How will we bridge the gap between traditional legal analysis and the evolving demands of the Web 2.0 marketplace? With the caveat that everything depends on whom you represent, let’s look at a few online content scenarios and see what current law and business practice says about ownership. Then we’ll change lenses and explore how a more progressive analysis might apply.
Scenario A: Your idea is to film people telling jokes at different Manhattan bars. You would distribute the clips from your new website. (See, e.g., www.channel4.com/4laughs). You don’t want to post to youtube.com because you don’t want to grant youtube.com rights to distribute your content. You plan to sell advertising on your new website.

Traditional legal analysis: Because yours is a commercial venture, you will need a release from the joke-teller. If the venues are identified, you will need releases from the owners. If there are posters on the walls in the bars, you will need releases from the copyright holders of the artwork. If liquor brand trademarks appear in the clips, you will need releases from the trademark owners. The jokes, if written by others, may also be subject to copyright.

Progressive analysis: Rather than write cease-and-desist letters, perhaps the copyright and trademark owners should consider licensing “use” of their work, on the premise that it would garner valuable, free promotion for them.
Scenario B. You are CEO of X-Co, a company that manufactures and distributes new age vitamins and supplements. Your marketing director has suggested you hire a professional blogger to write about X-Co products and X-Co competitors’ products. The blog will be identified with and linked to the X-Co Web site, but it will reside on its own page with its own unique URL and design.

Traditional legal analysis: X-Co will want to own the blog content. X-Co will want the right to edit or remove content (to reduce the risk of infringement liability or the revelation of trade secrets or client confidential information). X-Co will want the right to repurpose the blog posts -- perhaps in advertisements or other branded marketing executions. Under current law, if the blogger is an employee, the blog posts will constitute “work-for-hire” and the company will, in general, own them. If the blogger is an “independent contractor” the company’s employment agreement with the blogger would have language ensuring that the blogger’s work would constitute “work for hire” owned by X-Co.

Progressive analysis: Blog posts in a branded setting may lack credibility and be off-putting to consumers. A more beneficial approach might be to issue some basic blogger guidelines (e.g., bloggers will not disclose corporate or client confidential information), but to permit the bloggers to retain ownership of their blog posts and permit unedited content and comments.

Scenario C. You are CEO of X-Co. You are intrigued by the way users filmed Diet Coke and Mentos “explosions” – a series of online, user-generated videos that became one of the most popular viral clips on the Internet, to the benefit of both companies (though mostly Mentos). Envisioning your vitamins fizzing across the Internet on a similarly powerful marketing wave, you decide to invite users to do the same with your product. You set up a page on your Web site to accomplish this goal.

Traditional legal analysis: X-Co will want to own the user-generated videos. The X-Co Terms of Use will therefore require users to grant a nonexclusive license to X-Co. X-Co will also require representations from users that content they create (e.g., via “mash ups” “borrowing” or “sampling”) will not infringe third-party property rights.

Progressive analysis: While deploying some system to identify potential infringements may be necessary, rather than own all user-generated video containing X-Co products, why not announce the opposite: that users will own the content. The wildly popular Second Life permits its users to own the houses, weapons, characters, and other property they create while online. http://blogs.zdnet.com/social/?p=83 ; http://blogs.zdnet.com/social/?cat=11

Scenario D. You’re in charge of a newspaper’s digital strategy. To try to increase traffic and readership, you’ve decided to create a local newsblog where your readers can report local news which they become aware of. You recognize that this is just the sort of content that the print newspaper cannot provide and expect this will draw new readers and help to make the site stickier.

Traditional legal analysis: The newspaper’s in-house counsel prepares terms of use for the site that require all contributors to represent that they have not posted this information on any other website and agree that the newspaper has a “royalty-free, perpetual, non-exclusive, unrestricted, worldwide license, with the right to sublicense, use, copy, adapt, transmit, publicly perform or display such content.”

Progressive analysis: Limit the rights granted to those necessary to operate the local news website. Allow contributors to retain ownership of all rights to their content. This will create a friendly environment where contributors will not hesitate to share local news.

Scenario E: You’re a fan of a famous childrens author’s amusing and poetic writings as well as the music of a famous pop music icon. Your love of both leads you to experiment with mashing up some of the music icon’s best music with the most irreverent words from your favorite author. You do this to satisfy your creative urges and want to share it with everyone. You have no interest in earning any profit. It’s your hobby. So you upload these efforts to the new web 2.0 social networking site, shareyourmashup.com.(See, e.g. www.salon.com/news/feature/2007/04/13/dylan_seuss/)

Traditional legal analysis: Copyright owners must protect their copyrights from all unlicensed uses. So out go the cease and desist letters and down comes the mashup.
Progressive analysis:The mashups were actually quite clever. What great publicity for the author, publisher, artist, and recording company! Why not grant the fan a limited license to post the mashup online as long as uses are non-commercial? Hey, you may even help to hatch the next great broadway musical.
Conclusion. While there are no black-and-white answers to the business challenges posed by online content, we suspect that rigid application of the extensive rights granted by IP law may neither promote "the progress of science and useful arts" nor yield the most appropriate or beneficial result. Instead, the answer may lie in the willingness of parties on all sides to step away from one-size-fits-all approaches and, instead, examine their businesses through both a traditional legal lens, and a more progressive legal lens.

This article was first distributed at the Gotham Media Ventures: "Content - Who Owns What?" panel