Torrentfreak ran an article about FUNimation using downloaded subs to create their dubs. It read, in part:
There is no doubt that Funimation is using ‘pirated’ subtitles, but it seems unlikely that they failed to secure the appropriate rights.
This is based on what tempest of ANN wrote:
1) Funimation did use HS’s video/subs in that recording session
2) We do not know why, we do not know if it is regular behavior
3) Funimation is the licensee, and their license almost assuredly includes CR’s subtitle script
4) Funimation’s license and US Copyright law and USC Section 17 give Funimation the legal right to use HS’s video/subs
5) As a result of #3 & #4 Funimation’s actions (not including font) were not illegal
6) If the font in question was included as an additional file (and not hard coded), and we assume that HS does not have a license to distribute the font, Funimation may have unwittingly infringed the copyright of the font if they do not have an appropriate license for that font
7) We do not know for fact if Funimation has a license for the font
Now as for the ethics side… most of it is pretty subjective.
This is, broadly speaking, true, but two parts stand out.
I take issue with tempest giving #2 its own point because it’s blowing smoke. “We do not know if it’s regular behavior.” Why emphasize this? It’s safe to say at this point that some offical dubs use subs. Should we say that all of them do? No. But neither should we take the stance that this is probably some kind of aberration. Further proof is required to lean either way. The concern of fans is that this comes at a time when FUNimation is suing downloaders. Those lawsuits don’t hinge on “regular behavior,” do they? It is irrelevant whether this is regular behavior, so the only reason for tempest to bring this up is to discourage people from exploring the possibility that dubs they have paid money for consulted subs.
I take issue with the way #4 is written, because it is only true as long as HorribleSubs are ripping off Crunchyroll. In other words, there is no separate legal right that FUNimation has in that category. It is inaccurate to suggest that FUNimation has rights they don’t have.
First off, it’s legally fine for FUNi to download fansubs if they have the legal rights to distribute the thing to begin with. They have the right to download an English version of the episode because they give themselves that right, as the legal distributor. (The law is very accommodating – as long as one is on top.) Politically, though, this is insensitive and is probably what has some people upset: why are you suing all these people if you yourself rely on these subs?
But there is another legal issue: it does not follow that FUNimation automatically has zero obligation to reimburse or acknowledge the fansubbers who did the translations, assuming it can be proven that their dubs are a derivative work of those translations.
Now, if they are only using subs done by Crunchyroll, and CR says it’s OK, then there is never going to be any legal action, and this is a nonissue. But if they are using subs by fansub groups, without getting their OK, then there is potentially a problem.
As for points 6 and 7, they are side issues: this font is not appearing on the dubbed product, because it’s a dub. It’s unlikely to result in legal action, either way: font makers do not typically go around suing people for accidentally downloading their font without knowing better, the way that distributors go around suing people.
It would be an ironic twist to see a fansub group sue FUNimation in court for using their intellectual property.