Rights Squabble Begins Over New Media Explosion

As lawyers and talent agents increasingly battle to win their clients a share in the profits from the blossoming information superhighway, two pending lawsuits may shape the way contracts are drawn in the future.

A federal judge in Manhattan’s Southern District Court is hearing a case brought by several freelance writers against the New York Times, Newsday, Time and a number of database companies. The writers argue, among other points, that they were not compensated for thenwork when it was redistributed on CD-ROM, databases, online services and other electronic media. Typically, newspaper and magazine staffers are not compensated when their work appears on database services.

Like the plaintiffs, many playwrights and screenwriters have not secured the rights to their work being used on media that didn’t exist when the work was originally sold, according to Martin Garbus, a copyright lawyer in New York who handles a number of entertainment industry clients.

A second case involves the widow of an artist who sued Playboy for reproducing her husband’s work on posters. The widow won at the trial level, with the court ruling that she must be compensated because Playboy used her husband’s work in a different form than he intended. So while Playboy owned the artwork, it did not own the copyright.

When applied to the writers’ case, the Playboy ruling could mean that the writers own all rights to their work that they did not expressly transfer to others.

For the entertainment industry, that could shape the way negotiations for books, plays and screenplays pan out in the future.

The cases will help clarify how screenwriters, for example, are compensated for their scripts, which are increasingly finding their way onto da tabase services.

But beyond that, the cases will delineate who owns the rights to all sorts of writings when they are eventually distributed over technologies not yet invented. “One of the big questions now is who is going to control these rights, ” Garbus said. “Based on these cases, you’ll know something more about what rights you have. The decisions will tell you how to protect yourself.”

Increasingly, lawyers and agents are drawing up covenants that protect clients’ rights in the electronic age. But just as five or 10 years ago even the most sophisticated lawyers were unaware of how lucrative CD-ROMs or databases would be, few can guess what rights will need to be protected in the next century.

“Can you totally cover the future?” Garbus said. “You’re now at the cusp of that issue.”

To be sure, these issues are hardly new. At the dawn of television, when broadcasters aired old movies, actors were outraged that they were not compensated. Similarly, as cable TV and homevideo developed as ancillary markets, moviemakers squabbled over rights.

Of course, the two cases also will have a profound impact on deals that were inked years ago. If the writers and the artist’s widow win, floodgates will open for other writers and artists to make similar claims.

The stakes could be huge. Under copyright law, an adverse ruling forces defendants to return any profits and possibly pay legal costs and damages.

Regardless of the outcome of both cases, dealmaking for rights is going to become far more cumbersome, as lawyers and agents maneuver along the infopike.

“It’s going to make negotiations much more complex, much more textured, ” Garbus said. “It used to be that a movie was just a movie.”-Jay Greene

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