In my previous post, I only new the other side of the copyright laws that protects copyrighted materials. When I received a post in regards to having the right to rent, sell or lend the materials people have bought at a store it’s actually LEGAL.
I just wanted to make sure that all involved knows what is legal, but to the extreme shame our laws contradicts one another and doesn’t really protect our copyrighted materials. The names will be forever mentioned, but the money will not.
When a person or company purchases films, music or even overseas materials; it’s actually legal to resell, rent out or lend your purchased materials to people. In accordance to the First Sale Doctrine or in this case, the Distribution Rights:
For the first sale doctrine to apply, lawful “ownership” of the copy or phonorecord is required. As §109(d) prescribes, first sale doctrine does not apply if the possession of the copy is “by rental, lease, loan, or otherwise without acquiring ownership of it.”
Some software and digital content publishers claim in their end-user license agreements (EULA) that their software or content is licensed, not sold, and thus the first sale doctrine does not apply to their works. These publishers have had some success in contracting around first sale doctrine through various clickwrap, shrink wrap, and other license agreements. For example, if you buy MP3 songs from Amazon.com, the MP3 files are merely licensed to you and hence you may not be able to resell those MP3 files. However, MP3 songs bought through iTunes Store may be characterized as “sales” because of Apple’s language in its EULA and hence they maybe resell-able, if other requirements of first sale doctrine are met.
Courts have struggled and taken dramatically different approaches to sort out when only a license was granted to the end user as compared to ownership. Most of these cases involved software-licensing agreements. In general, courts look beneath the surface of the agreements to conclude whether the agreements create licensing relationship or if they amount to, in substance, sales subject to first sale doctrine under §109(a). Thus, specifying that the agreement grants only a “license” is necessary to create the licensing relationship, but not sufficient. Other terms of the agreement should be consistent with such a licensing relationship.
In Vernor v. Autodesk, Inc. the 9th Circuit created a three-factor test to decide whether a particular software licensing agreement is successful in creating a licensing relationship with the end user. The factors include: 1) whether copyright owner specifies that a user is granted a license; 2) whether the copyright owner significantly restricts the user’s ability to transfer the software to others; and 3) whether the copyright owner imposes notable use restrictions on the software. In Vernor, Autodesk‘s license agreement specified that it retains title to the software and the user is only granted a non-exclusive license. The agreement also had restrictions against modifying, translating, or reverse-engineering the software, or removing any proprietary marks from the software packaging or documentation. The agreement also specified that software could not be transferred or leased without Autodesk’s written consent, and could not be transferred outside the Western Hemisphere. Based on these facts, the 9th Circuit held that the user is only a licensee of Autodesk’s software, not an owner and hence the user could not resell the software on eBay without Autodesk’s permission.
However, the same 9th Circuit panel that decided Vernor v. Autodesk, refused to apply Vernor’s three-factor test in UMG v. Augusto to a purported licensing agreement created when UMG sent unsolicited promotional CDs to music critics. The promotional CDs’ packaging contained the language: “This CD is the property of the record company and is licensed to the intended recipient for personal use only. Acceptance of this CD shall constitute an agreement to comply with the terms of the license. Resale or transfer of possession is not allowed and may be punishable under federal and state laws.” Augusto tried to sell these CDs on eBay and UMG argued that first sale doctrine did not apply since the CDs were not sold and only a licensing relationship was created. However the court held that first sale doctrine applies when a copy is given away and that recipients of the promotional CDs did not accept the terms of the license agreement by merely not sending back the unsolicited CDs.
In the case UsedSoft v Oracle, the European Court of Justice ruled that the sale of a software product, either through a physical support or download, constituted a transfer of ownership in EU law, thus the first sale doctrine applies; the ruling thereby breaks the “licensed, not sold” legal theory, but leaves open numerous questions.
Now, I hope the Hmong entertainment industry understands how important it is to know the difference just as I have learned. For future reference, it’s always a good idea to form a business partnership where everyone wins and can help build a better a stronger Hmong Entertainment company. However, I would still suggest adding a good lawyer into the mix to keep away the confusion.
Lawyers do come in handy when the process of making a movie involves many contracts, legal forms, and in some unfortunate situations, lawsuits. You should contact a lawyer before making any decisions, and communicate with the local unions and government offices for the latest information. This is just a thought for future references.