Last weekend, the makers of the fangame MLP:Online announced that they had been sent a cease and desist letter from Hasbro and had chosen to shut down production of the game. This sudden news has met with significant disappointment from the Brony community, especially given the comparatively blind eye that had been turned to other popular fan-games under production, like Fighting is Magic or My Little Investigations.
Was Hasbro finally turning on the fan-community it had helped to foster over the past two years by not strictly enforcing copyrights? Not exactly. MLP:Online spokesperson ToastyJustice, who had announced the closure of MLP:Online, made a point of mentioning that it was not copyright that had brought down the project, but trademarks. This is an important distinction, one which has ramifications for both Hasbro and fans alike.
Given the differences between copyright and trademark law, can we perhaps better understand what activities are more or less likely to earn Hasbro’s ire? Is this recent attack based on trademark law likely to prove to be the bane of the fandom? To learn more, read on…
(DISCLAIMER: The legal commentary contained in this post is not made by a practicing lawyer and should not be used in lieu of professional legal advice. Only a professional intellectual property lawyer can provide accurate advice on what is or is not appropriate activity under your local IP regulations and case law.)
Types of Intellectual Property
In order to better understand Hasbro and the fandom’s relationship, we must first understand the different kinds of intellectual property and how they relate to the My Little Pony franchise. Most intellectual property in the world falls under one of four basic categories: patents, trade secrets, trademarks and copyright. Each of these categories serves a specific business purpose.
Patents and trade secrets generally relate to the engineering and design of specific, functional devices or the workflow of specific business processes, although these two categories differ in the details. Patents are governmental grants of monopoly to producers to encourage public disclosure of the inner workings of a device or business process. Trade secrets, in contrast, rely on the corporation to keep the inner workings secret. As long as the mechanism, engineering, or business process is secret, the owner of the secret has legal recourse against people who leak these “secrets”. However, unlike with patents, once the secret is publicly available, there remains no protection. Thus, there is a tradeoff between patents and trade secrets: patents have limited duration, but protect against copying fully during that duration; trade secrets have unlimited duration, but protect against only the first public release of that secret. Patents and trade secrets are not particularly relevant to Hasbro’s interactions with fans, as few fans (if any) are actively trying to find out how Hasbro’s toys are made. What does matter are the remaining two classes of intellectual property: copyright and trademarks.
Most fans are probably at least passingly familiar with the concept of copyright, thanks to the wide-spread practice of piracy and the education efforts made by copyright holders interested in reducing it. Simply put, copyright is a government monopoly granted to the creators of artistic works allowing them exclusive rights to control public performance and distribution of these works as well as any derived works. This monopoly is granted for a limited time (ignoring the ability of lawmakers to extend such terms retroactively); at the time of this writing, copyright durations for new creations are usually the life of the author, plus 70 years in the United States and the European Union, but may differ in other jurisdictions.
Copyrights may be granted to companies either through the explicit act of granting the copyright to a corporation or, more commonly, creating “works for hire” in which an artist is effectively “hired” to create a work for a corporation. It’s through this latter provision that the copyright of the animation of My Little Pony: Friendship is Magic and the characters is held by Hasbro Studios rather than the writers or the animators, as openly stated at the end of the credits (depicted above). In the case of a work for hire, in the United States, the copyright duration is 120 years after creation or 95 years after publication, whichever is shorter (in Europe, corporate copyright, where it exists, generally lasts until 70 years following the death of the last author of the work). Under this law, the first episodes of Friendship is Magic would not enter the public domain (a domain of works which are no longer subject to copyright restrictions) until January 1, 2106 in the United States, and possibly as late as 2180 in Europe (although realistically, it would probably expire in the 2140s or 2150s).
But what about the fourth category, trademarks? Trademarks are usually names or advertising slogans of products or companies for which monopoly rights are granted for the purpose of exclusively doing business and releasing products under those names. This allows companies to prevent competitors from capitalizing off of confusion with existing products. For example, Pokémon was not named “Pocket Monsters” in the United States as it was in Japan because of the 1980s/1990s toy line entitled “Monster in My Pocket”. In order to protect the right of the manufacturer of “Monster in My Pocket” to that name (and prevent the possibility of kids buying the Nintendo game thinking it was part of the “Monster in My Pocket” franchise), Nintendo chose to name the series “Pokémon” instead.
What is perhaps most notable about trademark law (and is particularly relevant in the MLP:Online case) is that, although trademarks are allowed to persist indefinitely, they carry two major limitations. The first limitation is that trademarks have an explicit scope which must be registered alongside the trademark. With such a scope, it becomes entirely possible for Ford Motor Company to exist side-by-side with the Ford Meter Box Company and Ford Models, as the three companies exercise trademarks in entirely different fields (Ford Motor Company makes cars, while the Ford Meter Box Company makes water meters and Ford Models is a modeling agency).
The second and more relevant limitation is that the trademark owner must act to defend any misuse of trademarks. If a company does not properly defend a trademark from misuse by third parties, there is the very real risk that the trademark may be ruled what is called a “generic trademark” (or at least invalid due to not being protected). A generic trademark is a product name which is so inextricably linked with a category of products that it has become synonymous with the product. In the process of becoming a generic trademark, terms like “kerosene”, “escalator”, and “zipper” have lost the legal protection that once allowed certain companies like the North American Kerosene Gas Light Company, Otis Elevator, and B.F. Goodrich to have exclusive use of those terms. Needless to say, although some companies with generic trademarks still produce these products, (Otis Elevator still produces escalators, and Bayer still produces aspirin, for example), most, if not all, of these companies are either defunct or no longer the leaders in their market. Now that any company may produce “aspirin” or a “thermos”, there is less incentive for people to buy the specific products from Bayer or Thermos LLC.
Other Kinds of Intellectual Property
It’s important to note that, although almost all intellectual property may be defined as belonging to one of these four types of intellectual property, the definitions of what actually makes up intellectual property (especially, what can be copyrighted) will differ from jurisdiction to jurisdiction. For example, all audio recordings made before 1972 are not actually covered by federal copyright in the United States, but rather a patchwork of state laws, many of which grant no explicit termination date to the copyright (so that, unlike the common rule of thumb that all works dated before 1923 are in the public domain, effectively every sound recording ever made remains under copyright in the United States until February 15, 2067 at the earliest). Similarly, in the United States, typeface designs are not considered copyrightable, while in many other countries, fonts and typefaces are afforded the same copyright protections as a work of art or a novel—so while the fan-made Celestia Medium might be legal, if unethically produced, in the US, it might not be in Europe.
My Little Intellectual Property
So where do Hasbro and the fandom fit in this mesh of IP laws? Well, it depends on what, exactly, fans are doing. In general, there’s very little that a normal fan of the show does that in and of itself breaks intellectual property law, other than perhaps illegally trading in ripped copies of the show. Simply viewing Friendship is Magic, discussing its merits, and idle speculation about where the show might go generally does not make a fan a violator of intellectual property rights. However, as soon as fans turn into fanartists, copyright and trademarks quickly rear their ugly heads.
It’s no secret that Hasbro has been rather lax about copyright enforcement with the fanbase of Friendship is Magic. Outside of stepped-up takedowns of YouTube videos of the episodes since the early days of season one, Hasbro has never issued cease-and-desist letters en-masse simply due to copyright infringement of character designs or names. Hasbro has been quite happy to allow a Remix Culture to flourish and produce products based on its intellectual property. This has not gone unnoticed by the old guard of content creators; Hasbro’s relatively lax attitude to copyright enforcement has attracted attention from Variety and Forbes, among others.
Although Hasbro would certainly be well within their rights to issue takedowns to any artist who dared to associate a character in one of their flagship toy lines for young girls with gambling, alcohol, or violence, so far, no such takedowns have been issued (To be fair, no such takedowns have been issued by any other copyright holders for My Little Pony cross-over artwork either). But Hasbro has not simply quietly acquiesced to its fandom as many other content creators have; instead, they have embraced the community of artists, and in turn, artists have embraced them.
WeLoveFans: Harnessing the Power of Fandom
Despite criticism of their sluggish response to demands of show-accurate toy lines, Hasbro has proven far more amenable to harnessing the power of the fandom through clothing and accessory retailer WeLoveFine. With Hasbro’s blessing, WeLoveFine has sold many officially licensed t-shirts, satchels, jackets, and other accessories to Bronies eager to show off their Bronydom to others. By delegating the responsibility of sub-licensing of the My Little Pony franchise to WeLoveFine, Hasbro has indirectly created a safe space which avoids the copyright issues that inevitably threaten fanartists who seek to profit off the intersection of their own hobbies and interests. By offering artists a chance to make use of WeLoveFine’s license from Hasbro, not only do WeLoveFine and Hasbro profit off the work of fanartists, but artists themselves are offered legal compensation for their work.
WeLoveFine is an example of a successful collaboration between Hasbro and its fans with respect to exercising Hasbro’s copyrights. Rather than waving their copyrights angrily as they (rightfully) do with uploaded videos, Hasbro actually helps their own brand and improves their standing in the eyes of fans. The collaboration allows all parties, Hasbro, WeLoveFine, and artists alike, to feel like they’ve gotten something in the deal: WeLoveFine and Hasbro profit off of the licensing of Hasbro’s copyright, the artist makes a nominal profit off granting their art to WeLoveFine, and fans everywhere can enjoy the breadth of pony art on various clothing and accessories from their favorite artists by turning to a single source, rather than merely hoping that their artist of choice has taken the time to find a preferred vendor and (hopefully) hasn’t been scared off in the process.
WeLoveFine has held several design contests, asking fans to submit their shirt designs. The winning designs (chosen either by guest judges or by popular vote) are then transformed into officially licensed merchandise along with a prize granted to the winner. These contest winners are also invited to join their pool of freelance contributing artists, the League of Mighty Fine Artists. The LMFA members can produce their own designs for WeLoveFine and earn royalties on every sale, instead of just a one-time cash payment or prize. In rarer cases, WeLoveFine has approached individual artists to purchase designs from them, like Soaring for Vengeance, which was produced by an independent fanartist not part of the LMFA.
There still are some barriers to entry. WeLoveFine is selective in the choice of artists it chooses to work with in its League of Mighty Fine Artists. Unless an artist is contacted by WeLoveFine directly to join or wins a contest run by WeLoveFine, it is very difficult to capitalize on WeLoveFine’s license from Hasbro. Furthermore, artists have a tough choice to make between making a modest amount from working with WeLoveFine, or keeping their own copyright on their art (WeLoveFine reportedly requires artists to effectively grant their copyright to WeLoveFine as if the artwork was a work-for-hire for WeLoveFine). While it is true that granting the copyright to WeLoveFine is perhaps a preferable, legal use when compared to simply redistributing the artwork, having broken Hasbro’s copyright on the character designs of the various ponies, permanently giving up the right to make reproductions to WeLoveFine (when future legitimate licensors may come on the scene to do a better job) may be an equally undesirable choice for some artists keen to retain some modicum of rights in the deal.
Though this collaboration is clearly beneficial in the world of fanart, it’s hardly a panacea for all fanartists. Artists who work on PMVs, fanfics, fangames and music are conspicuously absent, as WeLoveFine’s product line is clearly not suited for anything other than visual artists to benefit. Is there a way for Hasbro to work with these other artists in a similarly successful way? For musicians, at least, there is a simple way that doesn’t even require getting permission from Hasbro: mechanical royalties.
The Curious Case of MusicByOctavia
The Round Stable forums poster Octavia (MusicByOctavia on YouTube) is probably best known for his arrangements of various songs from the My Little Pony series (well, that and his musical contribution to the delightful “HASTILY MADE PONYVILLE TOURISM VIDEO”). Unlike other pony musicians, Octavia is quite possibly the only musician whose music isn’t only available on Bandcamp, but also makes his tracks available on the iTunes Store and Google Play. How is Octavia able to legally do this? The answer lies in “compulsory licensing”.
Compulsory licensing is a mandatory licensing framework for intellectual property that grants an individual a license to perform a specific activity with the intellectual property without first negotiating permission to do so, provided that the individual adheres to the law in so doing. Compulsory licenses (the exact nature of which varies from country to country) primarily exist in the realm of music copyright to permit activities such as radio airplay and playing and recording music covers which would otherwise be practically impossible if a license needed to be manually negotiated for each song played. For artists like Octavia, the relevant compulsory license is called a “mechanical license,” granted (in the United States, at least) to artists specifically to allow them to sell covers and rearrangements of music composed by another individual.
Acquiring a mechanical license is relatively straightforward. First, the artist must send a simple notification to the publishers of the composition (Britteridge Publishing, LLC and Allerton Publishing, LLC, both owned by Hasbro) expressing their intent to acquire a mechanical license. Once this is complete, artists must then pay an appropriate royalty fee to both the songwriters (usually Daniel Ingram and the scriptwriter) and publishers for each song sold (as of 2012, 9.1¢ per song, or 1.75¢ per minute, depending on which is more). In so doing, artists like Octavia may legally release arrangements of songs like “Becoming Popular”, “Smile, Smile, Smile”, and “Winter Wrap Up”
without even requiring Hasbro’s explicit permission in the production or licensing of the songs (UPDATE: This is not entirely true as of the time of this writing. Refer to our followup article for details).
There are some caveats, however. Mechanical licenses don’t include a right to remix the original audio recording. As a result, musicians who make use of the show’s audio (say, using the vocal track from “This Day Aria” or dropping in a sample of Rainbow Dash saying “LOUDER!”) cannot release their remixes without seeking proper sampling licenses from the copyright holder of the original sound recording (in this case, Hasbro Studios). In addition, musicians who live outside of the United States may not live in a country which offers a compulsory mechanical license framework. These musicians may, in fact, have to negotiate the right to distribute covers with the publishers directly, and these publishers may be different outside of the United States.
MLPOnline and the Future of Fangames
But where does this leave fangames like MLP:Online, the game that started this essay? Obviously these games tread on thin ice by their very nature of reusing copyrighted materials, but only MLP:Online appears to have been affected by intellectual property issues so far. Are other fangames at risk of being shut down next? It is the opinion of this author that most fangames are probably not at a severe risk for a cease-and-desist letter in the way MLP:Online was, primarily due to certain issues unique to MLP:Online. This is not to say that fangames are legal, merely that the risk for some may be less than the risk for MLP:Online. The reason for MLP:Online’s enhanced risk fundamentally stems not from copyright law but trademark law.
MLP:Online has certainly not been shy about the reasons for their shutdown, and the finger they point is primarily in the direction of trademarks, not copyright. As mentioned previously, the grant of a trademark assumes that the owner will vigorously defend the trademark against abuse. Although this does not pose a very large issue for most fanartists, it’s unusually problematic for fangames using the My Little Pony name, as one of the seven active trademarks on the name “My Little Pony” explicitly applies to “computer game programs” (Reg. Trademark 2659231, renewed November 13, 2012; other trademarks apply to clothing, prerecorded video tapes and DVDs, entertainment “services”/TV shows, and toy ponies and accesories). No doubt as a result of the renewal process in November (which may have itself been spurred on in part by the release of the recent Gameloft game), Hasbro or its lawyers came across MLP:Online, which openly advertised itself under the “My Little Pony” name (or at least its initials), and were thus obligated to address the intellectual property issues surrounding the game.
Could MLP:Online have renamed themselves and saved themselves trouble? It’s possible, but, given the additional eyeballs of lawyers, thanks to the existing trademark issue, it’s quite likely that the additional copyright violations quickly made it effectively impossible to slip by without proper licensing, not only of the “My Little Pony” trademark, but of the copyrights as well. In short, MLP:Online was caught based on trademark issues, and then, quite possibly, hung out to dry based on its copyright violations.
Is this a cautionary tale for other video game developers? Perhaps. It’s certainly less of a concern for other artists’ whose work can be legally produced, or at least who will almost certainly not fall afoul of Hasbro’s trademarks. Only proper legal advice could determine whether these various fanprojects should continue, but, to an extent, avoiding the use of the “My Little Pony” name in advertising and marketing a fangame is almost certainly a good first step. It’s hard to know for certain how aggressive Hasbro’s lawyers will be in defending the use of the “My Little Pony” trademark in fangames, but one would assume that refusing to use the trademark is better than making use of it.
Of course, simply staying on the good side of trademark law does not make these games inherently legal. Unlike musicians, fangames don’t have an “out” in the form of a compulsory license that they can make use of to stay on Hasbro’s good side. Similarly, it’s unlikely that Hasbro will ever grant an intermediary like WeLoveFine the right to sublicense out the “My Little Pony” trademark for use with fangames. The only legal way to produce these games (or at least distribute them) would be to obtain a proper license from Hasbro directly for the intellectual property involved, which is not a particularly viable option for most fangames in the first place.
Coming Around Again
Bronies are lucky that Hasbro has allowed the fandom around My Little Pony: Friendship is Magic to grow as big as it has, through the careful, lenient hand they’ve used with their intellectual property. For all of the complaints fans may have with heavy-handed approaches like those dealt to MLP:Online and others, these have largely been the exception, rather than the rule. Hasbro has generally been quite content to allow sleeping dogs lie with respect not only to PMVs and fanartists, but even with larger projects like Fighting is Magic. Even though Hasbro would be well within their rights to shut down such projects, it says much that they have only ever shut down projects which appeared to directly infringe on their rights or the rights of their sublicensors, such as full-episode YouTube uploads and clear trademark violations.
This isn’t to say that Hasbro should not be seeking more ways to engage the community of fan creators on the creators’ terms. Part of the reason for the success of My Little Pony in the older age brackets has been Hasbro’s lenient treatment of the fanworks that have grown up around the franchise. Although we here at The Round Stable recognize that Hasbro has a vested interest in keeping their intellectual property intact for their primary target audience, we hope that Hasbro keeps in mind that, by staying hands-off, they’ve allowed the unusual fandom to grow in ways nobody could have imagined. In the future, we hope that Hasbro will continue to work more toward monetizing the existing fandom through the use of sublicensors like WeLoveFine, which stands as a powerful example of how both sides can benefit. ■