. - 

BRNEY ENERAB.4 

OF TEXAS 

AUHTIN. TEXAS 78711 

The Honorable James R. Arnold 

Administrator 

Opinion No. H- 440 

Governor’s Office of Traffic Safety 

P. 0. Box 13449, Capitol Station 

Austin, Texas 78711 

Re: Whether film produced for 

state agency may be reproduced 

by private business enterprise 

and sold for a profit where the 

film is in the public. domain. 

Dear Mr. Arnold: 

You have asked whether the conditions attached to a federal grant, 

used by the Texas Education Agency to develop and produce traffic safety 

multimedia films and materials for driver education classes, permit. 

reproduction and distribution of the film and materials by a private business 

concern to the public at a profit. 

The grant was approved by the National Highway Traffic Safety 

Administration (NHTSA) subject to the conditions stated in its Consultant 

Policy Memorandum No. Rb-B-101 of February 14, 1972, par,“. 6(g) 

(l) Before publication or print$ng, the final draft 

report shall be submitted to the Regional Office 

for review and xoncurrence. 

. . ., 

. . . . 

(2) After a report has been accepted for publication 

or printing, it is to be regarded as information in the 

public domain and its further use does not require 

approval. Accordingly, the published version of the 

final report shall not be copyrighted, nor contain any 

restrictions which prohibit distribution and reproduction.. 

p. 2030 
. 

The Honorable James R. Arnold page 2 (H-440) 

As used herein, the term report generally refers to 

an,y result of consultant contracts, such as surveys, 

studies, manuals, guides, films, . . . etc. 

Under these terms, the Texas Education Agency executed a contract 

with a private production firm providing for the development of five .(5) 

driver education lessons and other materials adapted for use on certain 

multimedia equipment owned by the State. The final product due under 

the contract included “one (I) master copy of each lesson and fifty (50) 

sets of each lesson. Film stri,ps, films, and tapes must be provided 

with reels and in color coded containers adaptable to state owned storage 

equipment. ” 

The contract also provided that: 

Ai”‘;. II (A) 

The Texas Education Agency and the National Highway 

Safety Bureau would retain all copyrights. Title to 

all materials developed including master prints, 

internegatives and scripts will be transferred to the 

TEA upon completion of Contractor’s tasks. 

Art. IV (B) 

All programs, systems, designs or other materials 

developed by Contractor pursuant to this contract 

shall be the property of TEA, but Contractor shall 

have the right to use such programs for other purposes, 

provtded no confidential kformation is disclosed. It 

is dis~~m,c~ly understood that TEA, and any other 

agency of the State of Texas shall have the right to 

use, reproduce, or publish any or all of such programs, 

systtms, designs or other materials developed under 

the contract for any purpose without permission of 

Contractor, and without expense or charge. 

In our judgment, the rights of parties under the State contract are 

subject to the condi.tions of the funding grant as expressed in NHTSA’s 

p* 2031 
L c 

The Honorable James R. Arnold page ~3 (H-440) 

Policy Memorandum N. R6 -B -101. The overriding condition, recognized 

in the production contract, is that the product of the grant, once accepted 

by NHTSA’s regional office for publication, is forever and unconditionally 

in the public domain, and may be freely copied and used by any person or 

agency desiring to do so without prior approval or charge for the right to 

COPY. 

The Regional Administrator of NHTSA explained the purpose and 

effect of its policy of requiring all reports, including films, to be dedicated 

to the public domain: 

Our Consultant Policy Memorandum R6-B-101 relates 

mainly to copyright aspects, in that no materials 

developed shall be copyrighted nor contain any restrictions which prohibit distribution and reproduction. If 

[the Contractor], for example, sold a copy of the multimedia materials to an agency, whether in Texas or 

outside the State, then any or all of it could be reproduced 

or modified or used in anyway without prior approval. 

Since the contract has been fulfilled and the materials due the State under its 

provisions have been published and distributed, the film and materials 

produced under the agreement~may be copied and marketed by anyone, 

including the original contractor. The materials are now in the public 

domain and may be reproduced and distributed by a private business concern 

for a profit. G. Ricordi v. Haendler, 194 F. 2d 914 (2nd Cir. 1952). 

Neither the State nor the original contractor has the right to exclude any 

other person in possession of the materials from copying them, or using 

them. 

You have also asked whether the State must accept competitive bids 

before deciding who will be “permitted” to make copies of the films and 

material for public distribution. This would be the case if, under the 

contract, the State could retain a “property” interest in the materials 

after they were delivered. Under our interpretation of the grant conditions, 

the only property interest left to the State is the right to control access and 

use of the copies it owns. Expressly precluded is the right to “sell” 

pe 2032 
The Honorable James R. Arnold page 4 (H440) 

reproduction rights in the driver education materiala. Anyone who obtains 

the materials, whether from the State or otherwise, may copy and distribute 

them without prior approval. Consequently, competitive bidding is 

unauthorized if used as a means to restrict the right to,reproduce the films 

developed under the federal grant. 

However, if the State itself intends to purchase copies in addition to 

those produced under the original contract it must comply with laws relating 

to competitive bidding. See e.g., Article 664-3, V. T. C. S., State Purchasing 

Act of 1957. 

SUMMARY 

The conditions attached to a federal grant used 

by the Texas Education Agency to develop and produce traffic safety films and materials for driver 

education classes permit reproduction and distribution of the films and materials by a private business 

concern at a profit. 

Very truly yours, 

N L. HILL 

Attorney General of 

DAVID M. KENDALL, Chairman 

Opinion Committee 

lg 

Texas 

pa 2033