Hong Kong Baptist University · FACULTY OF LAW

AF7430 Chap.11 New Platforms and Who Owns a Character

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Chapter 11 of 11 · AF7430

New Platforms and Who Owns a Character

What dematerialised storage changed

Traditionally each kind of entertainment needed its own machine: a set for television, a player for films, a radio for free audio, a turntable or disc player for music.

Storage then dematerialised decade by decade, from vinyl through open reel, cassette and the videotape formats, laser disc, the optical disc generations and eventually online delivery, until a palm-sized drive held terabytes and then until nothing needed to be held at all. The lecture states the consequences in two short lists and an essay should use both.

On the debit side, content can be copied and circulated easily, and viewers no longer have to sit in front of a set at a scheduled time.

On the credit side, producers and artists can market and publish more easily, streaming services let audiences find work and experiment with it in ways that convert into paid consumption, libraries and archives earn money alongside new releases, and self-made artists have flourished.

Four disputes between the industry and the device

Read in order they build a doctrine.

Studios sued the maker of a home video recording format, arguing that selling a device capable of infringement made it liable for its buyers' infringement; the maker won on a split decision, the court focusing on private, non-commercial time-shifting at home, where a viewer had been invited to watch the work free of charge, so that reproducing the whole of it did not have its usual effect against a finding of fair use.

A recording industry body sued the maker of a portable digital audio player and lost, because the computer hard drive it copied from held much more than sounds and material incidental to them and so was not a digital music recording, making the copying paradigmatic non-commercial personal use.

A band sued a peer-to-peer file-sharing service after an unfinished demo leaked and obtained an injunction requiring the service to filter within seventy-two hours or be shut down.

And studios sued a distributor of free peer-to-peer software that knew of and encouraged infringing sharing while earning advertising revenue, and won: a company that distributes software and promotes it for infringing use is liable for the resulting infringement, because secondary liability applied where the software was used so widely that pursuing individual infringers was impractical.

The counter-argument, and the evidence behind it

After the recorder decision the industry lobbied for protective legislation and for a small statutory royalty on blank tapes, and got neither: home recording had become too popular, and the studios had in fact enjoyed increased profits in the home rental and sales market.

Tape, disc and later formats became a revenue line substantial enough that a film which never reached a cinema could still make money. Whether that market depressed the box office or stimulated it is arguable both ways, and the lecture quotes the blunt version, that the recorder, once thought certain to finish the movie business off, arguably became its saviour.

On the file-sharing side a study found that users who downloaded free music spent more on music, and the band that won its injunction took a lasting reputational hit from its own audience.

Streaming, platforms, and who owns a character

A service launched in 1997 as an online disc rental business became a global internet television network once streaming became viable, and the course identifies four effects: whole seasons released at once created binge watching, choice replaced the bundle, cord cutting followed, and the platform began producing original content.

A defamation claim against such a platform over a line about a named real chess champion survived the argument that a work of fiction owes nothing to the truth, because the series referenced real people and events and identified a real person by name.

The character disputes close the course: a costumed hero sold with thirteen pages of comics for a small sum, where the court held the payment was wages rather than purchase of the copyright and that the consideration bargained for was publication itself; a fantasy author's film, stage and merchandising rights sold in 1968 and litigated decades later over games and digital media; and a franchise whose rights outside one country turned on whether a document produced twenty years after the fact was authentic.

In this chapter

What this chapter covers

  • 01

    What each storage generation changed, and what it did not

  • 02

    Four disputes between the industry and the device, in order

  • 03

    Time-shifting as fair use, and why the case is narrower than it looks

  • 04

    Secondary liability, and what distributor conduct triggers it

  • 05

    The evidence that the feared format became a revenue line

  • 06

    Four effects of streaming on the traditional schedule

  • 07

    A defamation claim against a platform over a named real person

  • 08

    An impressionistic reading of words published on social media

  • 09

    Three character ownership sagas, and the different question each one asks

Worked example · free

An indexing app, lawful uses, and advertising revenue

Q [10 marks]. AskSia-authored practice. A developer releases an app that indexes links to films held on other people's servers. It takes no copies itself, its marketing says nothing about piracy, and it earns money from advertising shown inside the app. A studio sues. The developer says its tool has substantial lawful uses and that it cannot be liable for what users do. Assess. The marks shown are an AskSia study allocation, not the University's marking scheme.
  • 3State the authority the developer relies on and what it actually decided.
  • 3State the authority the studio relies on and what triggers it.
  • 4Identify the live factual issues and say which way each cuts.
The developer is arguing the recorder case and the studio will argue the file-sharing case, and the two are not in conflict. The recorder decision turned on the purpose the device was actually put to: private, non-commercial time-shifting of a broadcast the viewer had been invited to watch free of charge, which the court treated as fair use notwithstanding that the whole work was reproduced. The later decision does not displace that; it adds a second question, because a distributor of software promoted for infringing use is liable for the resulting infringement under secondary liability, and the court reached for that doctrine where the software was used so widely to infringe that pursuing individual users was impractical. So the live issues here are narrow and factual: what the lawful uses actually are in practice rather than in theory, whether anything in the developer's conduct amounts to encouragement, and whether advertising revenue that rises with infringing use amounts to profiting from it. Silent marketing helps the developer; revenue tied to volume does not.
Sia tip — Separate the maker from the seller in any device case; the same hardware can be lawful in one pair of hands and evidence of encouragement in another.
Glossary

Key terms

Time-shifting
Recording a broadcast for private, non-commercial viewing later, which one court treated as fair use even though the whole work was reproduced.
Secondary Liability
Liability for another party's infringement, applied where a distributor promotes software for infringing use and profits from that use.
Peer-to-peer Network
A network in which users make part of their own processing, storage or bandwidth directly available to other participants, including any files on their machines.
Binge Watching
Viewing a whole season at once, created by releasing complete seasons rather than following the weekly broadcast model.
Cord Cutting
Cancellation of a paid cable subscription in favour of streaming services, compared by the lecture to the disappearance of long-distance telephony.
Impressionistic Approach
A reading of words published on social media that reflects how quickly users scroll, rather than the analytical construction applied to considered writing.
Right Of First Refusal
An option to acquire work before it is offered elsewhere, exercisable within a stated period at a price no greater than another party has offered.
FAQ

New Platforms and Who Owns a Character FAQ

Is a device maker liable for what buyers do with the device?

Not by itself. A court held that selling a home video recording format did not make its maker liable, focusing on private non-commercial time-shifting of programmes viewers had been invited to watch free of charge.

A later decision added a second question rather than displacing the first: a distributor that promotes software for infringing use and profits from that use is liable for the resulting infringement under secondary liability. The live issues are therefore what the seller said and did, not what the device is capable of.

Can a fictional series be sued for what a character says about a real person?

Yes, if the statement identifies that person. A platform argued that viewers knew a work of fiction owes nothing to the truth, and a court refused to ignore that the series referenced real people and events, that the line identified a real person by name, that it referenced her real career, and that an actor resembling her appeared in the audience. The claim was settled before appeal.

A fictional framing does not cure a specific factual assertion about a named living person.

Why do disputes over a fictional character run for decades?

Because a character is a bundle of rights rather than one property. Publication, film and stage, merchandising, games and digital exploitation, and territory-by-territory rights can each be granted at a different time under a document written for the market as it then existed, so every new technology reopens the question of what an older grant covered.

That is why the reported sagas start in 1938, 1968 and 1976 and are still producing litigation, and why so many of them end in settlement rather than judgment.

Study strategy

Assessment move

Line up the four device disputes in chronological order and write one sentence for each saying what question the court asked, not what it decided. You will find the question changes from what the machine can do, to what the machine is, to what the user did, to what the distributor encouraged. Being able to say that sequence in two sentences is worth more in an answer than being able to name all four decisions.

Working through New Platforms and Who Owns a Character in AF7430? Sia is AskSia’s AI Law tutor — ask any AF7430 New Platforms and Who Owns a Character question and get a clear, step-by-step explanation grounded in how AF7430 is taught and assessed. Read this chapter free, then take your hardest questions to Sia.

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