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Interactive ownership unclear

HOLLYWOOD — So you’re speeding down the information superhighway, finding new business opportunities at every turn and catching all the greenlights.

That is, until your trip is suddenly stopped short by a pothole. More and more pioneers in the “new media” are discovering that the biggest such potholes involve a very basic issue — clearing the rights.

“The fight over copyright and intellectual property rights surrounding videocassettes will be nothing compared to these new, multidimensional products, ” says Mark F. Radcliffe, a partner at the law firm of Gray, Cary, Ware & Freidenrich who recently authored “The Multimedia Law Handbook,” a how-to for non-lawyers. “As more and more pre-existing work is used as a basis for interactive projects, software companies will increasingly have to ask themselves, ‘Do I really have the rights I think I do?’ Have you cleared it with the actors, with the music scorers, with choreographers? How about underlying rights to publicity?”

All of those questions can add up to irritating costs for Silicon Valley types who want to put together programs for $ 100,000 to $ 200,000. Suddenly having to pay copyright fees and royalties blasts that budget into outer space.

Of course, things look different from Hollywood’s point of view. Attorneys are still arguing over whether 1950s television contracts gave the networks and producing entities rights to a homevideo future they did not foresee. The water becomes even murkier as writers who have assigned publishing rights and movie rights suddenly find they may have lost multimedia rights.

“There are a number of publishers and producers out there who are trying to hang their hats on contract clauses that give them electronic book rights as also meaning they have interactive rights,” says Richard Thompson of Silverberg, Katz, Thompson & Braun.

Take the recent battle between publishers Simon & Schuster and filmmaker Quintex Entertainment Inc. over who had what rights to “Lonesome Dove.” The publishers had rights to publish the book, and in their contract they retained electronic rights. Yet when Quintex, which hadgot the motion picture rights from author Larry McMurtry, tried to distribute an audiocassette of the mini-series’ soundtrack, the publisher cried foul.

Many agree that as these new technological fields advance, their applications could well bring some changes in U.S. copyright law.

“I certainly think there will be changes because it’s becoming so easy to copy something, you just click a few buttons,” says Rex Heinke, of Gibson, Dunne & Crutcher. “The music industry is already set up to deal with this kind of mass copying with licenses readily available, but that same kind of system does not exist for magazine, book or movie rights — or for any other copyrighted work done on a large scale.”

Even the entertainment unions are struggling to come to terms with how to govern interactive policy. The Writers Guild of America, for example, has a one-page letter of adherence specifically tailored to interactive programming, but it only requires employing companies to pay health and pension contributions on behalf of writers.

“As this field is new, the Guild wanted to allow the most amount of flexibility to producers, especially those in the computer industry, so that they would employ Guild writers,” says Joel Block, union director of industry alliances.

And the computer software people they are dealing with are, for the most part , somewhat naive when it comes to copyright issues and talent compensation. After all, many of the fast-trackers are computer whiz kids who concentrate on the little screen, not the big picture.

“We’re still seeing a lot of the fly-by-night computer people just going ahead and using pre-existing material without getting permission and then dealing with it later,” Thompson says.

If the copyright issue is not complex enough, there’s also a number of broad patents raising their ugly heads. In the last year, a number of sweeping patents have been filed on software that have a direct impact on interactive TV and multimedia enterprises.

“A company called Compton’s New Media filed a patent last November that claims ownership against databases that access text, graphics, music … anything that can be interpreted as multimedia,” says Jeanine Parker, president-elect of the non-profit International Interactive Communications Society. “And to the surprise of everyone, the U.S. Patent and Trademark office granted it.”

Compton’s publishes a popular encyclopedia on CD-ROM discs. Its patent — which the U.S. Patent and Trademark office overturned late last week — was broad enough to apparently cover the entire practice of accessing such multimedia information, which would mean hundreds of millions of dollars in licensing fees for the company.

“Right now we have a system that is not sophisticated enough to analyze these patents appropriately,” Parker said.

To help combat these kinds of too-broad patents, Parker’s organization is forming the digital, patent and copyright issues task force, to deal with such issues on a global basis.

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