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I think with the legal concept of derivative works, they're clearly in the wrong. I also don't agree with modern copyright law on derivative works.
I'm fine with a regime where, say, "Star Wars" is a trademark, and where the specific, fixed form of the movies and books is intellectual property of Lucas Films or Disney or whoever. But I believe very strongly that someone who writes a 500 page book with Han Solo should be legally able to profit from their creation. The world doesn't benefit at all if a 500 page Star Wars fan fiction, becomes a 501 page work where all references to Star Wars IP have been scrubbed, and one page of boilerplate has been added trying to establish who San Holo our completely unique main character is.
The problem there is that you end up with a bunch of competing products that dilute the brand. Star Wars wouldn't be Star Wars if the film's initial success spurred the creation of 500 "Star Wars" films ranging from big studio productions to low-budget garbage. Studios already try to leech of of other projects by putting out similar movies as other studios to beat them to the box office (Volcano and Dante's Peak, the two Capote movies, etc.); could you imagine what would have happened if Columbia put out a different Episode 5 in 1979 without George Lucas's involvement? Do you think audiences at the time (who were mostly children) would have cared that the film wasn't an "official" release? Your scenario probably wouldn't happen without copyright protection because Star Wars would have been a successful film from 1977 that spurred a number of cash-ins and was quickly forgotten after Fox couldn't make any money off of it due to the brisk competition in Star Wars products, not to mention the oversaturation of inferior media. The idea of Star Wars fan fiction existing today would be akin to the idea of Ice Station Zebra fan fiction existing today.
Eh, Lucas Films would still be the only ones with the Star Wars trademark - and thus the only ones with a movie called "Star Wars", and if they had the right contracts with their actors they would be the only ones with Luke Skywalker played by Mark Hamill, Han Solo played by Harrison Ford, etc. While my proposed copyright regime would allow for unauthorized sequels, I think they would tend to do about as well as those cheap knock offs like "The Little Panda Fighter" and "Ratatoing" do already, or all the Star Wars knock offs of the 70's and 80's. Do you think any of those would have magically been better if they had been able to use the name "Luke Skywalker" for their characters?
Plus, I think people are naturally snobby enough that people would look down on knock-offs. Look at what happened with Pokemon and Digimon in the 90's and 2000's. They're actually very different franchises with different origins (Pokemon started as a video game, Digimon started as a tamagotchi-like virtual pet), but kids on playgrounds got into endless arguments about whether Pokemon or Digimon was better, with many sticking up their noses because Digimon was supposedly a cheap Pokemon rip off. The same would happen with Columbia's Star Wars knock off, which couldn't even be called "Star Wars" due to trademark issues.
I just don't think the risk of a rival studio "scooping" a rival studio's block buster movie is a very big risk of my proposed copyright regime. I think the bigger risk would be how my proposed regime affects the "little people" of the entertainment world. Imagine a big movie studio learning about popular web fiction like Worm or Unsong, and deciding to make their own unauthorized movie version of these works. While I do think social disapproval can be a slight salve for this kind of anti-social behavior - as it is in our copyright regime with cases like the creators of Superman being given good will "royalties" by DC decades after they had sold the rights for pennies, because DC wanted to maintain the good will of the fans - and it might be the case that some companies will cut deals with small creators even when they're not strictly, legally required to. There's also the possibility that an unauthorized Worm or Unsong movie would give the authors of those works the ability to leverage the copyright they do have, and make money from the original product. However, I think it's not unlikely that at least some of the time under my proposed regime small creators would put a ton of work into something only for the big players to use their idea without any payment, and they'd never be compensated by any other means.
Except they wouldn't have had a trademark in 1977 because titles aren't eligible for trademark unless they're part of a series, and Lucasfilms couldn't have demonstrated that they were part of a series because they weren't. So when Columbia gives Mark Hamill a boatload of money in 1978 to star in their Star Wars sequel, they'd have no problem using the title (and all the various ripoffs would have no problem, either). By the time Empire gets made in 1980 trademark protection is off the table because by that time Star Wars is in such common use that it isn't eligible.
Alright, then they make it "Lucas Film'sTM Star Wars", and people would know the genuine article is Lucas Film's until the franchise got off the ground.
And a lot of this is solved by actor contracts with a clause that says, "You agree to give us first choice for sequels involving you playing this character for the next 10 years", or whatever the closest legally enforceable version of that is.
There would still be possible loopholes, I'm sure. Like Mark Hamill playing an unnamed character who is suspiciously like Luke Skywalker in every detail, but that would have been possible in our world with current copyright laws, and that didn't happen.
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Combine this with the Coming AI Apocalypse™ by way of deepfakes. The normal version of this concern is manufactured scandal. But what about manufactured bootlegs?
It’s going to get easier and easier to make high-quality imitations of media. Official channels will credibly have the original, unedited versions, but pirates and secondhand purchasers are more likely to end up with changes, unauthorized sequels, who knows? Intentionally seeding with subtle variants would be hilarious. Imagine Stars War, except for every movie. “The torrent claimed it was the Disney+ version, I don’t know why they let George Lucas do another round of edits!”
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