The big news in the machinima world this week has been Microsoft's new "Game Content Usage Rules," which is a license that explicitly authorizes the creation of machinima (and other derivative works) using Microsoft game content. As far as I know, this is the first time a major commercial game vendor has created a "machinima license" to facilitate this exciting new genre. (Check out This Spartan Life's interview of Malcolm McLaren for an example of the amazing things machinima creators are doing using Halo.)
Microsoft deserves praise for the new license (even if it's partly motivated by the imminent launch of Halo 3, which includes a "Saved Film" feature that is sure to unleash many new machinima creations). But at a time when the likes of Blizzard (World of Warcraft) and Valve (Counter-Strike) have left machinima creators in legal limbo, it's noteworthy that Microsoft is trying to do the right thing here.
The new license appears to give you permission to do things that would otherwise be forbidden by copyright law. These permissions are in addition to any fair use rights you might otherwise enjoy (according to Microsoft's lawyers, Xbox games do not include any contractual terms intended to strip you of those rights). So machinima creators who use Microsoft games now have two choices -- they can follow the rules set out in the new license, or they can fall back on their fair use rights.
For example, the license does not extend to "pornographic or obscene ... or otherwise objectionable" creations. So, if you want to do something like that, you're back to whatever fair use would permit (consult with a lawyer!). In other words, no machinima creators are worse off thanks to this license, and many are better off.
(And there may be more good news soon. Hugh Hancock and I had a conversation with some of the Microsoft lawyers and game designers who developed the new license. They assured us that they would be considering revisions that might address some misunderstandings that stemmed from the current draft.)
Finally, here's the interesting GPL intersection: this new Microsoft license appears to be a pure unilateral license (in other words, permission), not a contract. After all, it can't be a contract because gamers never see it or agree to it when they buy Microsoft games. But if Microsoft sues you for infringement, you can assert this license as a defense ("I didn't know it at the time, but Microsoft actually gave me permission, along with the rest of the world"). This is exactly the same legal mechanism that is the foundation of the GPL.
To those of us who are licensing lawyers, that's an interesting development, as there are those who have questioned the GPL to the extent it's not a contract. Apparently Microsoft agrees with the FSF that unilateral permissions "work" in the world of IP licensing.
