Art, Electronic Outreach and American Democracy

and a more expansive one. "If the words are broad enough to cover the new use, it seems fairer that the burden of framing and negotiating an exception should fall on the grantor." Interestingly enough, some subsequent cases have cited, with approval, the Second Circuit's Bartsch case without even discussing the experience of the grantor. Bartsch stood as a benchmark on the subject of new uses for the next two decades . Then, in 1988, in the Ninth Circuit Court of Appeals, we had a major sign of turbulence on the subject of old licenses and new uses. The plaintiff, in 1969, had licensed defendant (1) to synchronize a musical composition in the motion picture entitled Medium Cool, and (2) to perform the composition as part of the motion picture in motion picture theaters and on television. In the 1980's, Paramount made and sold videocassettes of its motion picture. Plaintiff sued, alleging copyright infringement . The Ninth Circuit reversed the district court's decision in favor of defendant, Paramount, primarily because the parties had stipulated that VCRs for home use were not invented or known in 1969. Moreover, the Ninth Circuit ignored the Second Circuit's Bartsch decision, making no reference to the then 20-year-old landmark. Five years later, in a case involving the "Curious George" stories, the Court ofAppeals for the First Circuit described the approach of the Ninth Circuit as intended to prevent licensees from receiving a windfall associated with the invention of a medium not in existence at the time the underlying agreement was executed. According to the First Circuit, application of the narrow interpretation is appropriate in situations involving overreaching, or exploitation of unequal bargaining by a licensee or, perhaps, where a particular "new use" was completely unforeseeable and therefore could not possibly have formed part of the bargain between the parties. Otherwise, the First Circuit appears to favor what it called the "preferred" method, that is, the expansive interpretation of the Bartsch case here in the Second Circuit. On the other hand, as you might expect, where the granting language included use "by any means now or hereafter known or devised," the courts have had little difficulty in deciding the case in favor of the grantee, finding the grant containing such language to be broad and unambiguous and thus precluding any need in the agreement for an exhaustive list of specific potential uses. Thus, when you ask yourself whether the party from whom you wish to acquire multimedia rights is the owner of such rights in the previously exploited work, you might conclude that there is not only an issue of ownership of rights to the "new uses," but that there may also be an issue of the privilege of using such rights once you have acquired them, if such use may destroy or diminish values in the "old uses." Of course, you also now know that the scope of a grant may depend upon the court in which the issue will be litigated . Moreover, even before hearing my remarks, you probably would have asked yourself, "Am I looking for a license or a lawsuit?" On the other hand, if you are being aggressive because you have an errorsand -omissions or producers' insurance policy, then certainly review the extent ofyour coverage. Bear in mind that, generally, in the event of an injunction, insurance coverage does not extend to your lost investment in production costs, or to your advertising and promotion expenses; moreover, the typical policy certainly does not cover loss of your anticipated profits. Furthermore, one of the additional considerations such insurance does not cover is the huge disruption that this kind of litigation generates in-house. Under such circumstances, two conflicting rights holders may find that, as a practical matter, neither one can safely or profitably sell rights, and that unless theyjoin forces the resulting stand-offwill waste the value of the rights of each of them, especially since many rights, as you well know, are quite time-sensitive. Art, Electronic Outreach and American Democracy Elizabeth Broun In the debate we are hearing today among presenters, artists, commercial interests, content providers and users, there are profound implications for the meaning and role...