Common sense might not apply when it comes to copyright

Copyright, one of the two intellectual property rights explicitly mentioned in the U.S. Constitution, protects the expression of ideas, which can take the form of paintings, songs, movies and photographs, among other things. However, with the proliferation of such works online, many companies fail to recognize the legal implications of copying online material.

Along the same lines, as companies build their web presence, they fail to appreciate and protect their valuable rights.

Smart Business spoke with Dan Thomson, a partner at Emerson Thomson Bennett, about copyright, Fair Use, and the ways in which companies leave themselves vulnerable in this area of the law.

What are the issues businesses commonly encounter with copyright?

Many people falsely believe that anything found on the internet — such as images, videos, articles — are free to use. Using someone else’s work without permission, regardless of how available it may seem, is stealing.

Another area of confusion is understanding who owns what, especially when work for projects like websites and software are done by outside contractors. A common misconception is that hiring and paying a web developer to create your website also provides ownership of the copyright. However, according to copyright law, the copyright is owned by the web developer unless transfer of the copyright is explicitly written into the contract.

When it comes to work produced by employees, the relationship changes the equation. A web developer employed by a company to develop websites holds no copyright for the work they produce. That work belongs to the company. However, if a janitor takes pictures for the company’s website on the side, the company should be sure to have him or her transfer the rights for the images to the company, because taking pictures is not in the janitor’s job description.

How is copyright obtained and what protection does it offer?

A copyright exists as soon as the work is ‘fixed in a tangible medium.’ For example, for a painting, the copyright exists as soon as paint is put to canvas.

Since copyrights exist from the moment the work is created, a company’s copyrightable work is never completely unprotected. The problem comes when the company wants to enforce that copyright.

To actually enforce a copyright in court, and receive damages for a copyright violation, a copyright registration is needed, which is only obtained by filing an application with the U.S. Copyright Office. Registration provides for statutory damages that can be up to $150,000 per act of infringement, as well as attorney’s fees.

What is Fair Use and how does it relate to copyright?

Fair Use and copyright are directly related. It’s a statutory doctrine that allows for certain acts that would normally be considered copyright infringement to be undertaken without violation. This is most commonly the case in journalism, where substantial portions of a copyrighted work may need to be used.

There are four factors that must be weighed in determining Fair Use:

  • The purpose of the use — is it primarily for commercial or noncommercial purposes?
  • The nature of work — is it creative or highly technical?
  • The amount and importance of the work used.
  • The effect of the use of the potential market value of the work.

These factors will all be weighed, and if the factors weigh more heavily in favor of Fair Use, then the use will not be considered an infringement.

Copyright can be a difficult area of the law to understand because some of it may seem contrary to common sense. It’s important that companies understand that there are rules about how copyrighted materials can and can’t be used. Be aware of the issues surrounding copyright law and keep in mind the importance of having language in contracts with third parties that transfer the rights of copyrightable works accordingly.

Insights Intellectual Property is brought to you by Emerson Thomson Bennett