ABC Entertainment and Warner Bros. TV in Innovative Digital Deal

ABC and WBTV have entered into a complicated deal relating to rights in shows that WBTV produces for ABC, Variety reports.

Digression - essential facts for those not in the TV biz:

Many network shows are produced by outside producers. All of the networks are owned by studios, or vice versa, or by conglomerates that own both networks and studios.

Thus, the conglomerates are frenemies - they sometimes produce content for their own networks, and sometimes for their competitors' networks. Co-ownership of studios and networks was prohibited for many years by the FinSyn (Financial Interest and Syndication rules), but those were eliminated in the mid-90s.

There's a third set of corporate players in the TV business: the affiliates. Most network TV stations are not O&Os (Owned and Operated stations, e.g., owned by the networks themselves). Rather, they are network affiliates -- standalone entities or part of station groups owned by other media companies such as Hearst.

Back to the story:

The deal apparently allows ABC to stream the shows on ABC.com in year 1 (non-permanent) for up to 4 weeks from initial broadcast, then allows WBTV in year 2 to distribute the same shows via permanent downloads, DVD box sets and non-permanent streams. Each party keeps ad revenue from its own 1-year window.

WBTV has to brand the shows as ABC offerings. This is not surprising, since consumer perception of TV show brand is the network, not the producer. WBTV has not decided where to distribute the shows.

Last year, on "The Nine," the deal was different: ABC had streaming rights and WBTV had download. Contracts with its affiliates limit the number of shows ABC is permitted to offer via download to 25%.

Slow Growth for Movie Downloads

A study by Screen Digest Magazine predicts that the aggregate U.S. and European movie download biz will be $1.3 billion by 2011, reports Variety -- only 3% of the total home vid market.

Why so low? Lack of a "single download model," the trade paper reports. Presumably this refers to the diversity of formats and websites. In other words, the only one-stop shopping for movies will probably continue to be pirate services such as BitTorrent servers. :(

Terminology refresher:

Electronic Sell Through (EST) = download-to-own = customer downloads the movie and gets to play it forever on the proprietary player corresponding to the format of the file - analogous to home-video sell-through (sale).

Broadband video-on-demand = download or streaming that is playable for a limited time only - analogous to home-video rental.

Virtual Production - Real Issues

HBO has acquired an animated "documentary" entitled "My Second Life: The Video Diaries of Molotov Alva," that was shot entirely in Second Life, Variety reports. The production legal questions must have been interesting.

For instance: Did the filmmaker get personal releases and location releases? In what form - were hardcopies signed? In whose name - the avatar's or the RL person? If there is later a dispute over the release, what law and jurisdiction apply?

Location releases pose an interesting problem. Buildings in a virtual world are actually just artwork, of course - and artwork is more highly protected under the Copyright Act than physical buildings generally are. The release should be drafted in a way that takes account of this.

Likewise, an incidental image of an avatar may constitute copyright infringement, whereas an incidental shot of a RL person is not copyright infringement, and if it is in a public setting, it is generally not an invasion of privacy either.

Another difficulty is posting notices at virtual locations. How do you post effective notices in a world that allows people to teleport right into a space without ever seeing the posted notice? And how do you post a notice at all if the virtual building won't permit a virtual notice to be taped up onto it?

Blame Canada?

SAG and several below-the-line unions/guilds have filed a petition with the U.S. Trade Representative alleging that Canadian production incentives violate World Trade Organization rules, report Variety and the LA Times. The WGA and DGA are not part of the coalition.

The timing is odd, because runaway production has abated in the last several years. Indeed - ironically - the city of Toronto has just unveiled a list of recommendations for halting a slide in film and TV production in that city, reports Variety. Production declined by more than one-third over the period 2000-2006.

The reason for the gain in the U.S. and decline in Canada: the weakened U.S. dollar and aggressive countermoves by various U.S. states, which have offered enhanced incentives of their own. These are generally in the form of tax credits and rebates.

L'YouTube Ces Moi (in Thailand)

The Hollywood Reporter reports that the Thai government has lifted the five-month old ban on YouTube. Prohibition resulted from YouTube's refusal to take down content that disparaged the king, an offense in Thailand. YouTube ultimately caved - another reminder that free speech means something different overseas, even though the case isn't as troubling as the Yahoo-China dispute (see my earlier post).

Closing the Blinds on AdWords Suit

Google's AdWords system allows companies to have their ads run adjacent to search results that relate to keywords, including keywords that are their competitor's trademarks. For instance, if Pepsi wanted to, it could have ads for its soft drinks appear every time a user searched for "Coke". (Just a hypothetical example.)

Is this trademark infringement? A company called American Blind thought so, and sued Google. That suit ended in a settlement yesterday, however, reports Law.com, with no admission of liability. The issue will no doubt be litigated again, perhaps to conclusion.

Bespoke IP

The Fall shopping season has begun. While the rest of us buy clothes, the fashion industry is shopping for new IP protection, reports the NY Times. Fashion designs have very little protection under copyright, but the newly-revised Design Piracy Prohibition Act aims to change that, prohibiting copying of the overall appearance of clothing, handbags, belts and eyeglass frames. This specialized form of copyright would be for a term of three years.

In contrast to the designs themselves, fashion logos and designer names are already protected, by trademark law. In fact, the WSJ recently reported that designer Joseph Abboud can no longer use his own name as a trademark - he sold it. After two years out of the business, he's back, but under a new brand name ("jaz"), and in competition with the owners of his own name.

BTW, the customized form of protection proposed by the Design Piracy Prohibition Act serves as a reminder that there are many forms of IP, each with different (but sometimes overlapping) subject matter. A short list includes:

• Copyrights: Works of authorship, such as books, movies, music, software, art, characters.
• Trademarks: Logos, brand names, slogans, book and movie titles (sometimes), characters.
• Trade Dress: Overall look of a product or service.
• Patents: Inventions, processes, business processes (incl. Internet), software, designs.
• Trade Secrets: Confidential information with economic value
• Moral Rights ("Droit Moral"): Creative rights, such as the right to receive credit (attribution) or not have a work destroyed; limited applicability in U.S.
• Mask Works: Semiconductor chip layouts
• Designs: vessel hulls (boats) and fashion designs (if the proposed bill is enacted)
  

Microsoft & Machinima

The machinima blogosphere has been abuzz for the past two weeks with discussions of Microsoft's new Game Content Usage Rules. The new rules allow machinimakers to do their thing using a number of Microsoft video games, with a few restrictions. The devil is in the details, and negotiations are underway to loosen the new rules a bit.

Machinima, in case you're not a devotee, is the art of producing animated films using video games: instead of playing the game, the filmmaker (machinimaker) makes the characters interact with each other and records the interaction, adding dialog or a sound track.

Human-Implanted RFID - Chips Ahoy?

Giving privacy a shot in the arm, the California Senate passed a bill prohibiting employers from requiring their employees to have RFID microchips implanted under their skin. These are the same type of chips you've probably already implanted in your dog or cat. The State Assembly had previously passed the legislation.

One company already has FDA permission to sell chips for implant in humans, and apparently 2,000 people have had this done. There's also a company in Cincinnati that requires its employees to have them if they work in its secure data center.

Back in California, the bill now goes to the Governor, who once had a similar device implanted up his nose in the movie Total Recall. One hopes, based on that experience, that he will promptly sign the legislation.

Even if he does, the bill only applies to employers and employees. That leaves open a host of other scenarios. One day soon, no doubt, prisoners will be required to be chipped as a condition of parole, probation or house arrest, just as they're sometimes required to wear ankle bracelets today. In fact - ironically - the same day the Senate acted to restrict chips, the Assembly approved a bill expanding law enforcement's ability to impose ankle bracelets.

We can also expect to see chipping of registered sex offenders, even after their sentences are complete, just as they are required to notify police for life whenever they move. Next may come illegal immigrants, chipped as they are escorted out the door, or as a condition of amnesty. Welfare recipients might follow (they're already often fingerprinted).

Then there are the more voluntary applications, although the line between "voluntary" and "coerced" is not always clear. Parental fear of kidnapping may lead to chipping of kids, just as some parents today already fingerprint, photograph and collect DNA from their kids. You can see the rationale: "if it's worth protecting your cat, isn't it worth protecting your kid?" As those kids grow up, they'd probably remain chipped. Mental patients, and elderly people suffering from or at risk of dementia, are also likely target populations for chipping.

One day, too, as in Total Recall, the RFID chips will acquire GPS capability, increasing their allure, and the privacy risks. Unfortunately, we're on a slippery slope to a nation of geotracked "chipizens," but we've never been able to resist clever technology even when its benefits come at a price. Blogging's a perfect example - look how much privacy we're willing to give up in exchange for networking opportunities and 15 minutes of fame.

As they say, the road to hell is paved with good intentions. One day, we'll know the exact locations and identities of everyone on that road. Read more.

Facebook Faceoff

The dispute over who owns the Facebook IP turns out to be a three-way affair, perhaps like some of the hook-ups on the site itself.

In 2004, the founders of of a site called ConnectU sued Facebook, alleging copyright infringement and theft of trade secrets. The ConnectU founders - Harvard students at the time - claim that they conceived the idea of a collegiate social networking site, and asked another student, Mark Zuckerberg, to write the source code.

Zuckerberg, the suit alleges, began to write code, but then jumped ship and used the code - and the idea - to start what is now Facebook. ConnectU foundered, while Facebook prospered.

Today, the NY Times reports, another Harvard student - Aaron Greenberg - has appeared, with emails between himself and Zuckerberg that allegedly prove he created an on-line facebook before Zuckerberg/Facebook or ConnectU. Greenberg says Zuckerberg lifted his ideas. He's bitter, but he's not suing. (At least, not yet.)

Who's on top in this three-way tussle? Allegedly, there was no contract between ConnectU and Zuckerberg, and Zuckerberg was not a formal employee of ConnectU. If true, ConnectU may find its suit disconnected, because without a contract or an employment relationship, trade secrets are generally not protectible and the programmer owns the copyright.

Likewise, Greenberg apparently has no legal claim, because his ideas weren't secret - his system was public - and because he doesn't claim anyone stole his code.

The lesson for ConnectU: get it in writing. Without a Non-Disclosure and Invention Assignment Agreement, the other guy gets the girl (or guy) while you stay home alone playing video games. The lesson for Greenberg: first doesn't always win. And the lesson for the rest of us? See a lawyer before you start bringing in partners and collaborators. Class dismissed.