Legal Brief

Whether or not they recognize it, foundations grapple with intellectual property issues daily. In the first installment of a three-part series ("Research Grants and Intellectual Property," May/June 2004, www.foundationnews.org/
CME/article.cfm?ID=2913), Claudia Conner and attorney Robert Clarida discussed formulating an intellectual property policy and making research grants. They also provided a glossary of terms related to intellectual property.

In this article, Conner and Clarida continue their conversation about the ways that formal intellectual property policies can both protect foundation and grantee interests and spur creative thinking about grants and grantmaking, specifically when providing funding for the arts.

Conner: Foundations that fund the arts often have strong interests in fostering greater access. Those that support music performance, for example, may wish to encourage access for diverse audiences or diverse performers. They may be concerned about how new music is made accessible to performers beyond the ensembles that commission the music. There also may be questions about what constitutes a "product" when commissioning improvisational works that change from performance to performance. Are those issues that intellectual property policies can address?

Clarida: Yes, although the issues about access are much easier to deal with at the policy level because they are reducible to something concrete—attendance numbers, audience or performer demographics or conditions for fulfilling a commission. Questions like "What is the 'product' in an improvisatory work?" are far more abstract and the law is not very clear or predictable about the answers. So the approach to questions like that must focus on something tangible. I'm working with a dance company now, for example, that does work of that sort. Their grant agreement doesn't try to identify or define the work at all. It just says, in effect, "Here's funding to document what you do."

Conner: Some foundations are concerned about the impact of changes in copyright law on artists. For example, as it takes longer for materials to pass into the public domain, issues of rights, access and payments for showing images affect how artists or art historians can carry out their work. How might foundation intellectual property policies address the fiscal and creative impacts of such copyright protections?

Clarida: It's been said that copyright is a tax on readers for the benefit of writers, but it can operate as a tax on writers as well, if they have to pay for their scholarly or creative use of pre-existing work. If a starving Picasso had been forced to license every postcard he incorporated into a collage, we might not have those collages. So grantmakers can go to bat, legally, for the fair use privileges of grantees where they are at risk. For example, Oxford University Press put out The Beatles as Musicians, with two volumes of detailed, scholarly musicological analysis of Beatles songs. There are thousands of notated musical examples and Oxford made the brave—but risky—decision that it would not seek permission for any of them, on grounds of fair use. Last I heard, from an Oxford person on a scholarly-publishing panel, the books are being sold, no shots have been fired and no threatening letters have appeared.

Conner: Questions can arise about collections of individuals' stories that become compilations; this happens in dance, theater (A Chorus Line, for example), and anthologies. Those works of art can involve interviews with disenfranchised individuals who may reveal information detrimental to their own interests. Are there ways for formal intellectual property policies to approach legal and ethical protections for vulnerable individuals for whom confidentiality is a vital interest? For example, minors who are interviewed without adults present, or persons who are incarcerated, whose revelations are not protected by attorney-client privilege.

Clarida: Anyone who sits for an interview in a project like that needs to be told before signing a written release exactly what use might be made of his or her remarks. In many states, names and likenesses cannot be used without written consent, and children cannot give effective consent, so parents would have to sign on their behalf in every case. As to confidentiality, the interview subject has no more protection than the interviewer agrees to provide. If a foundation wants to make sure that no one is unfairly exploited, it could require interviewers to provide a high level of confidentiality, under a written agreement drafted or approved by the foundation.

Conner: Individual artists or companies may seek funding from a number of sources to cover the cost of a work, but then find themselves without enough money to complete it. In such cases, an individual may offer a loan—to be repaid by the artist when the work realizes some monetary return—or offer to invest in the work with an expectation of a return on the investment. How might foundations evaluate such approaches when they are combined with grants?

Clarida: Probably the best approach in such a case is for the foundation to focus on its mission. If the work doesn't get finished, nobody benefits and the grant was for naught. Would the fact that a grantee or investor might make a dollar be material to the public? Who should be the ultimate beneficiaries of the foundation's efforts? As we discussed in the previous article, a grantor might stipulate that some percentage of a grantee's commercial profits go back to the foundation to support other, less lucrative projects. In most cases, though, it would seem to be needlessly restrictive to dictate to grantees that they cannot accept more than one type of funding.

Conner: Sometimes a foundation makes a grant for a project on which it intends to hold the copyright—a work that the foundation intends to publish as its own report on the state of a particular field or a public policy documentary. We don't usually think of those kinds of projects as "funding for the arts," even when the funding results in prize-winning works of art. Are there factors a foundation should consider in deciding whether to hold or share a copyright in an artist's work?

Clarida: The main factor is the degree to which the foundation wants control over the use of the work. The copyright owner has the power to say no, or to place conditions on the use of the work, for example, to ensure that a publication be distributed free of charge or otherwise be used in a way that serves the foundation's mission. If the foundation doesn't want to have that control, there's no real reason for it to own the copyright. If the foundation just wants some of the revenue, that can be set up by contract no matter who the owner is. "Sharing" ownership reduces the foundation's control because any of the joint owners can say yes to a particular use—even if it's not a use the foundation would be happy about. So, joint ownership is less desirable than sole ownership, but still better than none at all—at least you get to say yes to the uses you like, even if you can't veto the ones you don't like.

Conner: Should foundations ask artists for a stream of royalties if a funded work has the potential to generate significant income?

Clarida: I am inclined to say foundations should ask for the moon, especially if that income in turn helps other artists or increases public access to the arts. But here is where the foundation has to examine its purposes in making grants to the arts. If the idea is to give money to artists with no strings attached, and thus reward and stimulate creativity for its own sake—like the MacArthur "genius" grants—then it is a little disingenuous for the foundation to ask for any of it back in the form of subsequent royalties. If the mission of the foundation is not simply to help artists, but to help society more broadly through the medium of the arts, there's no reason for a foundation to be shy about demanding royalties for works it has funded, provided the money helps serve that broader purpose.

This was the second installment of a series on foundations' intellectual property issues. In the September/October issue, the series concludes with a discussion of intellectual property issues raised by foundation promotional materials. Claudia Conner is a former board member of Intermedia, an international communications grantmaking program of the National Council of Churches of Christ and a former staff member of the Foundation for Child Development. Robert Clarida is a partner at Cowan Liebowitz & Latman, P.C., a New York law firm specializing in intellectual property issues.

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