Who Owns Pooh?

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In New York Times v. Tasini, in which Keller represented the newspaper and other defendants (including Time Inc., publisher of Time), the Supreme Court ruled that unless specified in contracts, newspaper and magazine publishers do not automatically own the right to resell freelance contributors' stories to such digital databases as LexisNexis. The publishers have since removed the freelancers' articles from the databases. Keller maintained that such rulings damage the public interest by withholding rights from the parties best positioned to publish works in the new medium.

From the authors' perspective, though, the issue is not whether the work can be disseminated but whether they should be paid when companies find new uses for their works. The more companies try to deny creators profits from new distribution methods, the more courts may be inclined to read contracts narrowly to level the playing field.

This court-sanctioned reversion to the artists or their representatives of rights in new media can mean gigantic headaches for companies like Disney, which could be forced to renegotiate hundreds of contracts each time a work is released in a new format. Disney experienced a similar situation 10 years ago when video rentals of hit films first began to take off.

Performers who had provided voices for title characters in such Disney features as Cinderella and Sleeping Beauty sued Uncle Walt, claiming that Disney had not paid for the rights to include their performances in video adaptations of the films. Peggy Lee, who had provided songs and dialogue for the film Lady and the Tramp for $3,500 in 1952, won a $3.85 million judgment in 1991 and later settled for an undisclosed sum rather than endure a long appeal.

Disney settled lawsuits with the Sleeping Beauty and Cinderella actresses. But it won several cases against orchestras and music publishers who tried to block the use of such compositions as Igor Stravinsky's Rite of Spring in videos of Fantasia without additional compensation. The different decisions hinged on specific contract language, but also mark a tendency of some courts to safeguard the rights of individual creators more zealously than those asserted by sophisticated entertainment companies.

Like other major studios and distributors, Disney is especially careful these days to try to secure a blanket license from its performers to use their work in current and future technologies. What seems like a blanket license today, though, may be Swiss cheese in 10 years, when an unanticipated new medium self-generating holography? 3-D lasers?--becomes the rage. The cost of renegotiating so many licenses may cause companies to charge ahead with new uses before they have established exactly what rights they hold. "Sometimes when there is a market opportunity, companies think they have to act on it. The time it takes to untangle all the rights is prohibitive," says David Green, senior counsel at Corbis.

Because technology cycles are quickening, distributors cannot count on having more than a few years to exploit their existing rights in a work. As a result, businesses must price their merchandise to make as much money as possible up front. "This is a huge problem and will continue to be a huge problem," says Lanning Bryer, a lawyer at the New York City firm Ladas & Perry, which specializes in intellectual-property cases. "The game is to keep everyone else off the golden apple for as long as possible." Or, as in the Pooh case, to keep them off the golden honeypot.