WIPO - CEDA
Sub-regional Symposium
on
Intellectual Property (IP)
For SMEs
Suriname - July 18 and 19, 2005
St. Lucia - July 22 and 23, 2005
Jamaica - July 25 and 26, 2005
Dominican Republic - July 28 and 29, 2005
1
The Business of Copyright
in a
Creative Economy
Donna Ghelfi
Program Officer
Small and Medium-sized Enterprises Division
World Intellectual Property Organization
2
This presentation
1.
Creativity in a Creative Economy
2.
Why is Copyright Relevant to your Business?
3.
How can you generate income from your
creations protected by copyright?
4.
Merchandising
5.
Conclusions
3
How to make money from your ideas
Owners of copyright have great power to
define how their works are used.
Important to consider a range of possibilities
to commercialize your works.
It is possible to simultaneously grant various
licenses for one single work:
To
different
users
For specific
manners of
exploitation
For
limited
period
of time
In
limited
territory
For
specific
purpose
4
Creativity in an Creative Economy
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“Creativity” is the ability
to generate something new.
It means the production by one or more people of
ideas and inventions that are personal, original
and meaningful.
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“Managing creativity involves knowing, first,
when to exploit the non-rivalrous nature of ideas
and, second, when to assert intellectual property
rights and make one’s ideas-as-products
rivalrous. These two decision points are the crux
of the management process.”
John Howkins*
* Source: “The Creative Economy - How People Make Money from Ideas” by John Howkins, (pg. 122)
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What are the Creative Industries?
Is there a category confusion?
Creative
Industries
Copyright
Industries
Content
Industries
Cultural
Industries
Digital
content
-- largely
characterised
by nature of
labour inputs:
“creative
individuals”
-- defined by
nature of asset
and industry
output
-- defined by
industry
production
-- defined by
public policy
function and
funding
-- defined by
combination of
technology and
focus of industry
production
Adverstising
Architecture
Design
Interactive
Software
Film and TV
Music
Publishing
Performing arts
Commercial art
Creative arts
Film and video
Music
Publishing
Recorded media
Data processing
Software
Pre-recorded
music
Music retailing
Broadcasting
& Film
Software
Multimedia
services
Source: Cutler & Co/CIRAC, 2003, (see papers by Stuart Cunningham)
Museums &
galleries
Visual arts &
crafts
Arts education
Broadcasting &
film
Music
Performing arts
Literature
Libraries
Commercial art
Film & video
Photography
Electronic
games
Recorded media
Sound recording
Information
storage &
retrieval
-- www.creativeindustries.qut.com
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10
Industry cluster
is
economically
significant
Creative industries
Is a
high growth sector
Economic
multipliers
Why the Creative Industries
are Important?
Important as
intermediate inputs
Cultural and social
Fuels creative capital
force
and
for creating civil society
creative workers
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Source:Adapted from paper by Stuart Cunningham, ‘Policy Instruments to realise the economic potential of the cultural industries’,
CIRAC, Queensland, Australia
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… But creativity is not just the domain of the
arts, but that also of the sciences ….
“Both arts and science are attempting to imagine (to visualize)
and describe (to represent) the nature and meaning of reality.
The difference comes in why they choose to do so, how they
present their imagining to the world, and how they protect its
economic value. Put simply, the creativity is the same; the
creative products are different.”
John Howkins
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Source: “Europe in the Creative Age” Richard Florida and Irene Tinagli, February 2004
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What is Copyright
 Grants authors, composers, and other creators
legal protection for their literary and artistic
creations (‘works’);
 Gives ‘bundle’ of exclusive rights, which allow
owners to control the use of their original works in
number of ways and to be remunerated;
 Also provides ‘moral rights’ which protect the
author’s reputation and integrity.
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A Bundle of Exclusive Rights
Economic Rights
– Reproduce or make
copies;
– Distribute to public;
– Sell, rent*, lease*, lend,
license;
– Display or perform to
public;
– Adapt and Translate
(“Derivative works”);
Moral rights**
– Right of paternity: of
acknowledgement;
– Right of integrity: to object
against mutilation and/or
distortion of work;
** Moral rights cannot be
transferred; but may be
waived.
Assignment or License
* Generally applies only to certain types of works: i.e. Cinematographic works; musical
works, or computer programs.
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Copyright Works
Films
Literary
Dramatic
Sound Recording
Music
Artistic
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Important note:
Copyright protects
the expression of your idea
and not the idea itself
The Work
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The Idea
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What are Related Rights?
There are three kinds of “related rights”:
Rights
of performers
•
Actors
•
Musicians
•
Singers
•
Dancers
… or generally
people who
perform in their
performances;
Rights of
producers of
sound recordings
(also called
phonograms) in
their recordings
(cassette
recordings,
compact discs,
etc.);
Rights of
broadcasting
organizations in
their radio and
television programs
and in Internet
broadcasts such as
‘podcasts’.
22
Example, in the case of a song
by Barry White …
a dna ™emiTkciuQ
rosserpmoced )desserpmocnU( F FIT
.erutcip siht ees ot dedeen era
… Copyright protects
the music of the composer and
the words of the writer, and ...
… Related rights would apply to ..
the performances
of the musicians
and singers who
perform the song;
Can't Get Enough/Just
Another Way to Say...
(1973/75,IMS Records)
the sound
recording of the
producer in
which the song
is included;
the broadcast
program of the
organization
that produces
the program
containing the
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song.
Copyright
• Term of protection:
Generally speaking:
Life of author plus,
at least, 50 years.
• Copyright subsists
worldwide: Berne
Convention
• There is no
necessity for
registration.
24
© Permissions
— Any person or company wishing to use protected works
for most purposes must normally obtain prior authorization
from the copyright owner(s).
Note: There are free uses or ‘fair use’ or ‘fair dealing’ / limitations
and exceptions for particular purposes:
 personal use;
 quotations;
 parodies;
 criticism;
 use for teaching purposes;
 news reporting;
 scientific research;
 libraries;
 certain cases of reproduction.
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Why is Copyright Relevant to
your Business?
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1. Control of Commercial Exploitation
Copyright protection will enable your business to control
the commercial exploitation of its valuable creations,
such as ...
– computer programs
– advertisements
– instruction manuals
– musical compositions
– photographs
– catalogs
– video games
– commercial databases
– technical drawings
– films
– magazines
– architectural works
– websites
– sound recordings
– television and radio programs or any other creative works
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2. Derive Income
 Copyright is a tradeable asset that may be owned,
bought and sold the same as other types of property.
 It can be an important long-term value for your
business if the work is of quality or is a commercial
success.
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3. Protecting New Areas of Technology
Copyright is crucial for the protection of works
emerging out of new areas of technology, such as …
Multimedia works that combine software technology
with copyright protected content, and
… all kinds of digitized works that may be
commercialized via the Internet.
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4. Using Works Owned by Others
Most businesses use copyright materials owned by
others.
For example
… You may use computer software or databases created by
others.
…You may use in your company’s catalog or on your website
photographs taken by others.
Using other people’s creations requires, in most
cases, prior permission from the copyright
owner.
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5. Attract Financing
Companies that own copyright assets may find creditors more
willing to extend a line of credit secured by a security interest
in such assets.
For example, a library of distribution rights to films.
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6. Effective Marketing and Advertising
Enticing marketing or advertising materials requires use of
creative text, artwork, logos, etc., which are all protected by
copyright.
In the digital environment, companies are turning to the
Internet and use copyright protected works on their
websites to get noticed, build loyalty and ultimately boost
sales.
 short movies,
 online music,
 interactive games,
 contests and
 other new marketing ploys
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7. Avoid Problems or Financial Loss
By respecting the copyright of others, your business
will be able to avoid being disrupted or incurring a
loss for violating the copyright owned by others.
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8. Effective IP Management and
Business Strategies
Copyright protected works may be used as industrial
designs or trademarks …. therefore effective
protection and management of the underlying copyright
may be a precondition for effective management of the
resultant industrial design or trademark.
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9. Consumer Welfare
In general, the objective of copyright is to compensate
the creator for his creative efforts so that the process of
creation becomes sustained over time. This helps drive the
growth and development of an economy.
By promoting creation, copyright also serves
to benefit the public, enhance user access and
increase consumer welfare.
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How can you generate income
from your creations protected by
copyright?
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There are many ways to commercialize
your original and/or creative works
you may simply sell the original works that
are protected by copyright, or make copies or
reproductions and sell the copies;
you may allow someone else to reproduce
or use the works; this can be done by licensing
your economic rights over the works;
you may also sell (assign) your copyright
over the works, either entirely or partly.
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1. Commercialize your work yourself
Exploit your works individually :
— Simply sell the products;
— Make copies of the products and sell
them;
— Reproduce the works on t-shirts, posters,
etc.;
— Exhibit the works in museums, craft
exhibitions, fairs, etc.
38
If you sell your work, do you lose
your IPRs over it?
The mere sale of a copy of a work protected by
copyright -- does not automatically transfer
copyright to the buyer.
e.g. a painting or a manuscript.
39
The property rights over a physical object
(work) are completely independent from the
IP rights of the creator.
The buyer of a work acquires the physical
object, but not the copyright, design rights,
etc. over the work.
IP rights in the work remain with the creator
unless he expressly assigns it by written
agreement to the buyer.
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Example: Artist sells his painting …
Buyer cannot make copies and sell them … reproduction
right.
Buyer cannot print the painting on postcards and sell
them … reproduction right.
Buyer cannot exhibit the painting in art gallery or other
public place …exclusive right to show the work in
public.
Buyer cannot alter the work in a way that is prejudicial to
the honour or reputation of the author … moral right to
object to derogatory treatment.
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2. Sell your IP Right(s) ...
You can transfer all or part of your exclusive rights
to someone else…
– “Assignment”
– Irrevocable transfer of the owner’s entire interest in all or
some part of the intellectual property
– In writing + signed
– May be partial (type of right / time)
Buyer becomes the new owner of the transferred
rights …. copyright, trademark, design, etc.
42
Example: Artist sells copyright in his
painting ...
Buyer can exhibit the painting, reproduce it on
postcards, take a photograph of it, etc.
Artist cannot reproduce it on postcards, etc.
without explicit authorization from the
copyright owner.
BUT: Moral rights remain with the artist.
» No derogatory treatment.
» Right to be identified as author.
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3. Authorize someone else to reproduce
or use your work
Artist can authorize someone else to exploit
his/her IP rights, against payment ….
– i.e. through the granting of a license.
Authorized person (licensee) can only use the
rights in the specific form and under the specific
conditions allowed by the license …
– i.e. only one reproduction, in specific magazine, in
color, with a biography of the artist, etc.
44
Remember
License  Transfer of rights
Artist (licensor) retains the IP rights
– Artist can authorize several people to exploit the
works simultaneously
– Exclusive vs. non-exclusive licenses
Licensee does not acquire any ownership of
the IP rights
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When should you consider licensing or
selling your copyright over a work?
The exclusive rights can be divided and
subdivided and licensed or sold to others in just
about any way you can imagine:
— by territory;
— time;
— market segment;
— media
— content; etc.
This means you can grant different licenses, to different
persons or companies, at the same time.
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Why should a business consider licensing?
• Income: Can generate lucrative fees and royalties;
• New markets: Allows business to enter into new
product categories or in new geographical areas in a
relatively risk-free and cost-effective way;
• Marketing tool: Increases the business’ exposure
and recognition.
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Copyright…
Consider licensing if …
… in the artwork ...
 you don’t want to be
involved in manufacturing;
 you don’t have capacity to
produce more items;
 you don’t want to produce
in your domestic or foreign
market (in Dominican Rep. or
abroad);
 you don’t have capacity to
distribute elsewhere;
 you want to benefit from
the better reputation of a
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partner
As a general rule, the key to getting
most out of your copyright is:
… to retain ownership: License your rights, rather than
selling them;
… to determine your licensees’ concerns: Talk
licensees out of broad licenses, and talk licensees into exactly
what they need. Generally, the more specific and restrictive the
license, the more favorable to you;
… to license, to re-license, and to re-license:
When you grant a non-exclusive license to a client, your
copyright is not diminished or consumed. Your copyright
remains intact and full in force to be licensed again, and again,
and again.
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Merchandising
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What is Merchandising?
Merchandising is a form of marketing whereby IP
rights (typically trademarks, industrial
designs and copyright) are used upon
corresponding goods.
Generally done through licensing : No assignment
of rights, only an authorization to use the work
in a specific manner.
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What is Merchandising?
… Strip cartoons, actors, pop stars, sports celebrities,
famous paintings, buildings, statutes, and many other
images appear on a whole range of products, …
…. such as ...






T–shirts,
toys,
stationary items,
coffee mugs,
posters,
cereals,
canned foods,
soft drinks,
children’s ready meals,
dairy products,
confectionery,
key chains, etc.
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Examples of Merchandising
Paintings…
Botero
Picasso
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Drawings and cartoons …
Panda from the WWF
Fido Dido < Joanna Ferrone and Susan Rose
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Architectural works …
Taj Mahal, India
Eiffel Tower, Paris
Atomium, Brussels
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Photographs …
• “Guerrillero Heroico” < Alberto Korda (1960)
• Key rings, agendas, hats, socks, bed linen, kitchenware, etc.
• However, Alberto Korda received only very little financial
remuneration for the use of his photograph
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Advantages of Merchandising
– For the artist:
• His work is promoted, and will gain recognition and value in
the market
• Receives additional and continuing remuneration (+ heirs)
• Maintains ownership over his rights and controls the uses of
his works
– For the merchandisor:
• Can use the attractiveness of a work to promote the sale of
his products
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Case Study:
Mary Engelbreit
• Mary Engelbreit is known throughout the world
for her colorful and intricate designs, and has
become a pioneer for art licensing.
• Beginning: "drawing to order" for free-lance
clients.
• Wanted to be a children's book illustrator.
• Went to New York  "mild reception" from
publishers
• Suggestion: illustrating greeting cards
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Several well-known card companies bought her
designs, and sales were brisk.
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Other companies were anxious to
merchandise Mary's distinctive artwork on a
wide range of products including calendars,
T-shirts, mugs, gift books, rubber stamps,
ceramic figurines and more.
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• 1986: Mary Engelbreit greeting cards had blossomed into a
million-dollar-a-year business. She decided to license her
cards to Sunrise Publications to free up more time for her art
and to grow her business in other areas.
• Mary Engelbreit Studios now has contracts with dozens of
manufacturers who have produced more than 6,500
products in all.
• Mary takes extreme care in choosing only the best
companies to work with and goes to great lengths to make
certain that her artwork is reproduced as faithfully to her
original work as possible.
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• 2001: Mary saw her original dream come true when
she signed a contract to illustrate children's books for
publishing giant HarperCollins.
When Mary was young, people told her that
being an artist was not a realistic way to make a living,
but Mary Engelbreit was never one
to be easily discouraged.
“I believed in myself,” she says, “and now I'm living my
dream.”
Source: www.maryengelbreit.com
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Conclusion
63
How to make money from your ideas
Owners of copyright have great power to
define how their works are used.
Important to consider a range of possibilities
to commercialize your works.
It is possible to simultaneously grant various
licenses for one single work:
To
different
users
For specific
manners of
exploitation
For
limited
period
of time
In
limited
territory
For
specific
purpose
64
But Above All ….
• Protect your IP
• Choose the right protection
• Beware of overlap provisions
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Thank You
Donna Ghelfi
Program Officer
Small and Medium-sized Enterprises Division
World Intellectual Property Organization
66