Myths and Facts in Avoiding Copyright Infringement

Author: by Dianne Brinson

An understanding of legal issues is essential to success in the game industry. Mistakes can cost the game developer tens or even hundred of thousands of dollars in legal fees and damages. For example, Delrina lost hundreds of thousands of dollars and had to recall all of the copies of its screen saver when it lost a copyright suit. Delrina distributed a screen saver in which one of the 30 modules showed the comic book character Opus shooting down Berkeley Systems' "flying toasters" (made famous in Berkeley's "After Dark" screen saver program). Berkeley Systems sued Delrina for copyright and trademark infringement. The court ruled for Berkeley Systems, prohibiting further distribution of Delrina's product and requiring Delrina to recall all of the product not already sold.

The copyright ownership dispute between two leading game developers, Michael Saenz and Joe Sparks, provides another example of the importance of dealing properly with legal issues. The dispute focuses on whether Joe was an employee or independent contractor of Reactor, Inc. (Mike Saenz's company) when they developed the successful game "Spaceship Warlock." If Joe was right in claiming that he was an independent contractor, he is co-owner of the copyright and has a right to half of the profits from the game. These profits could be worth hundreds of thousands of dollars. The court did decide that Joe Sparks was a co-owner of the copyright and the suit was later settled.

Legal matters in game development are frequently complex and you should not rely on the information in this primer alone. You should consult with experienced counsel before making any final decisions.

COPYRIGHT LAW

There are two reasons why it is important for you as a game developer or publisher to be familiar with the basic principles of copyright law:

Copyright law is a federal law, and so the law does not vary from state to state (although the interpretation of the law maybe different in different courts).

Basic Principles

This section summarizes the basic principles of copyright law, including the types of works that are protected by copyright, how copyright protection is obtained, and the scope of the protection.

Works Protected

Copyright protection is available for "works of authorship." The Copyright Act states that works of authorship include the following types of works which are of interest to the game developer:

Obtaining Copyright Protection

Copyright protection arises automatically when an "original" work of authorship is "fixed" in a tangible medium of expression. Registration with the Copyright Office is optional (but you have to register before you file an infringement suit in the United States if you are a United States company or citizen, and registering early will make you eligible to receive attorney's fees and statutory damages in a future lawsuit).

Here's what "original" and "fixed" mean in copyright law:

Neither the "originality" requirement nor the "fixation" requirement is stringent. An author can "fix" words, for example, by writing them down, typing them on an old-fashioned typewriter, dictating them into a tape recorder, or entering them into a computer. A work can be original without being novel or unique.

Only minimal creativity is required to meet the originality requirement. No artistic merit or beauty is required.

A game can incorporate preexisting material and still be original. When preexisting material is incorporated into a new work, the copyright on the new work covers only the original material contributed by the author.

Scope of Protection

Copyright protects against copying the "expression" in a work, not against copying the work's ideas. The difference between "idea" and "expression" is one of the most difficult concepts in copyright law. The most important point to understand is that one can copy the protected expression in a work without copying the literal words (or the exact shape of a sculpture, or the exact "look" of a stuffed animal). When a new work is created by copying an existing copyrighted work, copyright infringement exists if the new work is "substantially similar" to the work that was copied. The new work need not be identical to the copied work.

A copyright owner has five exclusive rights in the copyrighted work:

In addition, certain types of works of "visual art" also have "moral rights" in the United States which limit the modification of the work and the use of the author's name without permission from the original author.

Anyone who violates any of the exclusive rights of a copyright owner is an infringer.

A copyright owner can recover actual or, in some cases, statutory damages (which can be as high as $100,000 in some cases) from an infringer. In addition, courts have the power to issue injunctions (orders) to prevent or restrain copyright infringement and to order the impoundment and destruction of infringing copies.

The term of copyright protection depends on three factors: who created the work, when the work was created, and when it was first distributed commercially. For copyrightable works created on and after January 1, 1978, the copyright term for those created by individuals is the life of the author plus 50 years. The copyright term for "works made for hire" (see below) is 75 years from the date of first "publication" (distribution of copies to the general public) or 100 years from the date of creation, whichever expires first.

Generally, the copyright is owned by the person (or persons) who create the work. However, if the work is created by employee within the scope of his or her employment, the employer owns the copyright because it is a "work for hire." The copyright law also includes another form of "work for hire": it applies only to certain types of works which are specially commissioned works. These works include audiovisual works, which will include most games. In order to qualify the work as a "specially commissioned" work for hire, the creator must sign a written agreement stating that it is a "work for hire" prior to commencing development of the product. (Remember that this primer deals only with United States law; most foreign jurisdictions do not recognize the "specially commissioned" work for hire, and you need an assignment to transfer rights in those countries).

Avoiding Copyright Infringement

Current technology makes it fairly easy to combine material created by others - film and television clips, music, graphics, photographs, and text - into a game. Just because you have the technology to copy these works, that does not mean you have the legal right to do so. If you use copyrighted material owned by others without getting permission, you can incur liability for hundreds of thousands or even millions of dollars in damages.

Most of the third-party material you will want to use in your game is protected by copyright. Using copyrighted material without getting permission - either by obtaining an "assignment" or a "license"- can have disastrous consequences. An assignment is generally understood to transfer all of the intellectual property rights in a particular work (although an assignment can be more limited). A license provides the right to use a work and is generally quite limited. A discussion of the terms of licenses and assignments is beyond the scope of this primer (this discussion takes up several entire chapters in our book).

If you use copyrighted material in your game without getting permission, the owner of the copyright can prevent the distribution of your product and obtain damages from you for infringement, even if you did not intentionally include his or her material. Consider the following example:

There are a number of myths out there concerning the necessity of getting a license. Here are five. Don't make the mistake of believing them:

Myth #1: "The work I want to use doesn't have a copyright notice on it, so it's not copyrighted. I'm free to use it."

Most published works contain a copyright notice. However, for works published on or after March 1, 1989, the use of copyright notice is optional. The fact that a work doesn't have a copyright notice doesn't mean that the work is not protected by copyright.

Myth #2: "I don't need a license because I'm using only a small amount of the copyrighted work."

It is true that de minimis copying (copying a small amount) is not copyright infringement. Unfortunately, it is rarely possible to tell where de minimis copying ends and copyright infringement begins. There are no "bright line" rules.

Copying a small amount of a copyrighted work is infringement if what is copied is a qualitatively substantial portion of the copied work. In one case, a magazine article that used 300 words from a 200,000-word autobiography written by President Gerald Ford was found to infringe the copyright on the autobiography. Even though the copied material was only a small part of the autobiography, the copied portions were among the most powerful passages in the autobiography. Copying any part of a copyrighted work is risky. If what you copy is truly a tiny and nonmemorable part of the work, you may get away with it (the work's owner may not be able to tell that your work incorporates an excerpt from the owner's work). However, you run the risk of having to defend your use in expensive litigation. If you are copying, it is better to get a permission or a license (unless fair use applies). You cannot escape liability for infringement by showing how much of the protected work you did not take.

Myth #3: "Since I'm planning to give credit to all authors whose works I copy, I don't need to get licenses."

If you give credit to a work's author, you are not a plagiarist (you are not pretending that you authored the copied work). However, attribution is not a defense to copyright infringement.

Myth #4: "My game will be a wonderful showcase for the copyright owner's work, so I'm sure the owner will not object to my use of the work."

Don't assume that a copyright owner will be happy to have you use his or her work. Even if the owner is willing to let you use the work, the owner will probably want to charge you a license fee. Content owners view multimedia as a new market for licensing their material.

In 1993, ten freelance writers sued the New York Times and other publishers over the unauthorized publication of their work through online computer services. And the Harry Fox Agency and other music publishers have sued CompuServe, an online computer service, over the distribution of their music on the service. The CompuServe suit was later settled, requiring the payment of fees to the copyright owners of the music.

Myth #5: "I don't need a license because I'm going to alter the work I copy."

Generally, you cannot escape liability for copyright infringement by altering or modifying the work you copy. If you copy and modify protected elements of a copyrighted work, you will be infringing the copyright owner's modification right as well as the copying right.

Special Myths about the Internet

Much public domain material is available on the Net government reports and uncopyrightable factual information, for example. However, much of the material that is on the Internet is protected by copyright.

In addition to the general copyright myths discussed above, there are a number of myths about how copyright law applies to copying material from the Internet and posting material on the Internet. We’ll discuss some of them in this section.

Copying Material from the Net

Don’t make the mistake of believing these myths about copying material from the Net:

Internet Myth #1: If I find something on the Net, it’s okay to copy it and use it without getting permission.

While you are free to copy public domain material that you find on the Net, generally you should not copy copyrighted material without getting permission from the copyright owner whether you find the material on the Net or in a more traditional medium (book, music CD, software disk, etc.).

Internet Myth #2: Anyone who puts material on a Web server wants people to use that material, so I can do anything I want with material that I get from a Web server.

Individuals and organizations put material on a Web server to make it accessible by others. They do not give up their copyright rights by putting material on a Web server. Also, the person who posted the material may not own it.

Internet Myth #3: It’s okay to copy material from a Home Page or website without getting permission.

Much of the material that appears in websites and Home Pages is protected by copyright. If you want to use something from someone else s Home Page or website, get permission unless permission to copy is granted in the text of the Home Page or website.

Posting Material

And don’t believe these myths about how copyright law applies to putting copyrighted material owned by others on the Net:

Internet Myth #4: It’s okay to use copyrighted material in my Web site so long as no one has to pay to visit my Web site.

Unless your use of the copyrighted work is fair use (see "Fair Use", later in this article), you need a license to copy and use the work in your website even if you won’t be charging people to view your website. (You also need a public display license.)

Internet Myth #5: It s okay to make other people’s copyrighted material available on my Web server so long as I don’t charge people anything to get the material.

Copying and distributing copyrighted material without permission can be copyright infringement even if you don t charge for the copied material. Making material available for others to copy can be contributory infringement.

When You Don't Need a License

You don't need a license to use a copyrighted work in three circumstances: (1) if your use is fair use; (2) if the work you use is in the public domain; or (3) if the material you use is factual or an idea.

Fair Use

You don't need a license to use a copyrighted work if your use is "fair use." Unfortunately, it is difficult to tell whether a particular use of a work is fair or unfair. Determinations are made on a case--by-case basis by considering four factors:

If your work serves traditional "fair use" purposes - criticism, comment, news reporting, teaching, scholarship, and research - you have a better chance of falling within the bounds of fair use than you do if your work is a sold to the public for entertainment purposes and for commercial gain. Consequently, the use of copyrighted materials in most games does not qualify for fair use.

Public Domain

You don't need a license to use a public domain work. Public domain works - works not protected by copyright - can be used by anyone. Because these works are not protected by copyright, no one can claim the exclusive rights of copyright for such works. For example, the plays of Shakespeare are in the public domain. Works enter the public domain in several ways: because the term of the copyright expired, because the copyright owner failed to "renew" his copyright under the old Copyright Act of 1909, or because the copyright owner failed to properly use copyright notice (of importance only for works created before March 1, 1989, at which time copyright notice became optional). The rules regarding what works are in the public domain are too complex for this primer, and they vary from country to country.

Ideas or Facts

You don't need a license to copy facts from a protected work or to copy ideas from a protected work. The copyright on a work does not extend to the work's facts. This is because copyright protection is limited to original works of authorship, and no one can claim originality or authorship for facts. You are free to copy facts from a copyrighted work.

Creating Your Own Works

Naturally, you don't need a copyright license for material which you create yourself. However, you should be aware that the rules regarding ownership of copyright are complex. You should not assume that you own the copyright if you pay an independent contractor to create the work (or part of it). In fact, generally the copyright in a work is owned by the individual who creates the work, except for full--time employees working within the scope of their employment and copyrights which are assigned in writing.


This primer is based on the Multimedia Law and Business Handbook (1996) from Ladera Press, which has been praised by the Interactive Multimedia Association. This summary of the law should not be viewed as "answering" most questions (the book discusses these issues in more detail in 320 pages and includes twenty -two sample agreements to show how these issues are dealt with in actual transactions) You can order the book by calling 800-523-3721 or faxing 810-987-3562.