A Corporate Guide to Copyright
The Purpose of Copyright
The purpose of copyright has been debated since its inception. One view is that copyright exists so that authors may monetize and profit from their works. The idea is that copyright exists to exclude others from using the work without paying for it. This view is supported by the exclusivity granted by copyright and the heavy statutory fines that can be levied against infringers. The copyright term also supports this view. Copyright extends beyond the life of the author and is assignable by will to account for the families that a deceased author may have left behind. For corporate authors, the copyright term lasts 95 years from the date of publication or 120 years from the date of creation, whichever is shorter. Such a specific and identifiable term limit supports the idea of copyright as a corporate asset.
An alternative view of copyright is that it exists to provide just enough incentive to authors so that they will continue to create new works. In other words, it is meant to help disseminate works, not to help authors hoard them. It is not intended to make an author a millionaire, but merely to allow him to earn a living while pursuing the arts. This view is often argued by citing the language of the Constitution: “The Congress shall have the power […] To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” This is the view supporting the concept of fair use: the idea that in special situations a copyright may be violated without legal liability.
U.S. Copyright Law 101
If a work is copyrightable, copyright applies immediately upon inception. A doodle in the margin during a boring meeting receives instant copyright protection. Registration of the copyright with the federal government is not a requirement. Before framing that doodle as a great work of art, here is what copyright does require:
- The work must have been created by a human author or authors, even if computer generated. However, that copyright requires a human author does not invalidate copyrights owned by corporations. Copyright recognizes the distinction between an author and an owner. Therefore, a corporation will hold a valid copyright in a work created by an employee in the scope of their employment. Similarly, in some instances, an independent contractor can create a work (e.g., a map, chart, or other graphic) that a corporation may own copyright in. These types of works are called works for hire.
- The work must be original to its author or authors and exhibit at least some amount of creativity. Note that originality in copyright has two meanings. Originality means that the work has not been copied; it has its origin in the author. Originality also implies some degree of novelty or creativity. However, copyright law does not speak to artistic merit. An incredibly banal and “unoriginal” idea may nonetheless be copyrightable if the expression of that idea was not copied and is at least minimally creative.
- The work must fit into at least one of the eight categories listed in the statute. Those categories are: literary works; musical works, including any accompanying words; dramatic works, including any accompanying music; pantomimes and choreographic works; pictorial, graphic, and sculptural works; motion pictures and other audiovisual works; sound recordings; and architectural works.
- The work must be somehow tangible and capable of perception. For example, an idea is not protectable because it is not tangible. Most works will easily fit this requirement. A speech is one example of a work that may not qualify. If an impromptu speech is given and no record is taken (e.g., the speaker took notes, or wrote an outline, or had someone record him), then that speech is not subject to copyright because it has not been “fixed;” it isn’t tangible. Even if someone in the audience was particularly moved by a section of that speech and is able to reproduce it word-for-word, they would not be infringing because no copyright exists.
- The work must exhibit some form of expression. Expression is the sine qua non of copyright law, so anything not exhibiting expression is not copyrightable.
Knowing what can receive copyright protection, there are a few key categories of subject matter that can never be copyrighted. Ideas, for example, are not copyrightable. This makes sense when considering that copyright is meant to only protect expression. If Romeo and Juliet was written by an American author under the current copyright system, the exact words of the play would be protected. However, the general idea of star-crossed lovers from feuding families would not be. Were West Side Story to be performed in the very next theatre, the plays would not infringe each other merely for sharing a general plot scheme. Titles are also not protected by copyright. A particularly marketable title would need to be looked at under trademark law. Further, copyright does not extend to procedures, processes, systems, methods of operation, or discoveries. Such protections are offered under patent law.
It may also be said that copyright does not apply to the mundane. The threshold for creativity required in order to receive a copyright is very low. However, a threshold does exist. Facts, for instance, are not copyrightable. Every biography of Shakespeare is going to contain the same facts about his life. However, many different biographies containing the same facts may be copyrightable as to the authors’ unique expressions of those facts. In a similar vein, standard expressions are not copyrightable. Two people who paint the same Chicago street scene are going to have remarkably similar works. However, the fact that both works would contain coffee shops, street signs, parked cars, and pedestrians does not make the second painter an infringer of the first painting.
What rights do copyright owners have?
The owner of a copyright registration has the right to sue infringers. However, even without registration, the Copyright Act grants six exclusive rights to copyright holders:
- Reproduction: The copyright owner has the exclusive right to make copies of his work. Regardless of what the work is or the medium in which it exists (i.e., digital or print), this right has the same effect. An artist who puts out a vinyl record still has the exclusive right to make digital copies of the work.
- Derivation: The copyright owner also has the exclusive right to make works based upon the original work. A derivative work may incorporate the original (e.g., da Vinci repaints the Mona Lisa to give her jewelry and make-up), or it may be simply based upon the original work (e.g., da Vinci paints a series of other women using the same background and painting style).
- Distribution: The copyright owner’s exclusive right to distribution applies to both traditional and digital media. This right only applies to the first distribution, however. A poet who self-publishes a collection of her poems has the exclusive right to decide if and when that book will be sold to the public. Once she sells a copy, however, the owner of that copy may sell it or give it away without breaking copyright. One caveat to this rule: if the sale was subject to license or other contract there may be other legal remedies for the author to pursue. This is particularly relevant for corporations when dealing with software. In fact, a judge in the Second Circuit recently held that all software is purchased pursuant to a license and the buyer does not have a resale right.
- Public Display and Public Performance: Depending on the type of work, the copyright owner will have the exclusive right to publicly perform or display the copyrighted work. This right prevents the purchaser of the physical copy of a play from performing that play without the permission of the playwright. This would also be the right invoked by a painter whose work was displayed on the wall in the background of a television program without permission.
- Digital Audio Transmission: A newly added right, the owner of a copyright in a sound recording has the exclusive right to stream that recording to the public digitally. Think internet and satellite radio.
Special Considerations Regarding Ownership and Term
As mentioned above, copyright law distinguishes between authors and owners. An employee may create a work that his employer owns. The employee is the author, but the corporation is the owner, and therefore the rights holder. For traditional employee-employer relationships, this division is automatic. The work is considered a “work for hire.” The copyright statute provides that the employer is the owner of any work created by an employee within the scope of his employment (i.e., the work was of a type the employee is generally paid to create). To take an example, a Human Resources employee who writes a manual dealing with company procedures will not own the copyright in that manual. Even if she was not specifically asked to write the manual, it will easily fit into the category of tasks within the scope of her employment. On the other hand, if that employee is also an avid writer of fiction, her published novel will not belong to her employer.
A work for hire may also be a work that has been commissioned by a company from an independent contractor. However, the statute restricts commissioned works for hire to works to be used as contributions to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas. A company that translates a visitor’s map of Chicago into Polish or Spanish for a map-making company could be considered to be in a work for hire relationship with the map maker. In order for the corporation to own the work there must be a written contract stating that the work is being made for hire. As a best practice, the contract should also state that in the event the work does not qualify as a “work for hire,” the author assigns all rights to the corporation. In California, it is illegal for independent contractors to make work for hire contracts, so contracts with Californian contractors should always include an assignment of the work to the corporation.
Work for hire can be a very tricky doctrine, so it is best to consult with the corporation’s legal team when making decisions regarding assets that may or may not qualify. It is important to know, however, that whether a work does qualify as a “work for hire” or not affects the term of its copyright protection. Under current U.S. copyright law, the work of an individual author receives protection for the life of the author plus an additional 70 years. A work made for hire, however, receives protection for 95 years from the date it is published, or 120 years from the date it is created. Knowing the term of copyright on a corporate asset is essential for long-term planning.
Copyright Infringement and Penalties
Copyright infringement occurs when any of the exclusive rights listed above are exercised without the permission of the copyright owner. Copyright infringement is based on strict liability. That means that it is not based upon knowledge of the law or the intent of the infringer. This is a critical concept in the corporate setting. In a similar vein, because copyright notice is no longer required to maintain protection, an infringer may not even know that the work was subject to copyright, but he could still be liable for infringement.
When a copyright has been infringed, the owner has several available remedies ranging from merely stopping the infringement to receiving monetary damages. Certain types of infringement may even result in criminal liability for the infringer. The appropriate remedy depends upon the individual choice of the copyright owner and the severity of the infringement.
If a copyright owner is concerned only with stopping the infringement, he can file for an injunction. If successful, the court will order the infringer to cease the infringing activity. Other than potential costs of a defense to the injunction, the infringer may not have any monetary liability to the copyright owner. In the right circumstances, a copyright owner may further ask the court to order that all infringing materials be impounded and/or destroyed.
A copyright owner who is concerned about a monetary loss due to the infringement will likely get an injunction and then sue for damages. The Copyright Act allows for the recovery of either lost profits or statutory damages. If the copyright owner chooses to recover actual damages and profits, recovery will be limited only to the amount of damages that can be proven. The other option, statutory damages, is often much more severe. If the owner timely registered his copyright, he is entitled to at least $750 for each work that was infringed. Repeat: For each work proven to be infringed, the infringer is automatically required to pay at least $750. At the court’s discretion, this amount can be as high as $30,000. If the infringement was willful, the court can increase the fine per work to $150,000. These amounts apply to every infringement regardless of its severity. That means that an infringer who willfully downloads a song from a peer-to-peer network may be liable for up to $150,000 even though the song would only be worth $0.99 had it been paid for. Amid these hefty fines there is one glimmer of hope for the infringer: these fines are per work, not per violation. That means that that even if the infringer used that downloaded song to make a CD, which he then distributed to one million people, he pays just one statutory fine (not one million fines). A special note for copyright owners: an infringement suit cannot be brought until the copyright is registered. Also, if the copyright is not registered at the right time the owner will be barred from recovering those hefty statutory damages. In order to receive statutory damages, the copyright registration must be filed within three months of the first publication of the work or within one month of learning about the infringement, whichever comes first. Corporations should always register their copyrights immediately so that they can take advantage of the statutory fines.
Certain types of infringement may even result in criminal liability in the form of fines or jail time for the infringer. Particularly of note for businesses, infringement of copyright for commercial gain or private financial gain is criminally punishable. Even if not for financial gain, the reproduction or distribution, including by electronic means, during any 180-day period of any copies of any number of copyrighted works with a total retail value of more than $1,000 is criminally punishable. One positive for corporations is that corporate sabotage may fall under the criminal copyright statute. Anyone who distributes a work being prepared for commercial distribution by making it available on a computer network accessible to members of the public can be criminally liable if that person knew or should have known that the work was intended for commercial distribution. This is the statute to cite against internal leaks or attacks from hackers. These criminal punishments are in addition to any damages paid to the copyright owner. Prison sentences range from three to ten years depending on the severity of the infringement. Depending on the individual situation, corporations that criminally violate the copyright statute may have its employees, directors or even shareholders found liable.
There is one pseudo exception to copyright infringement. The doctrine of fair use essentially acknowledges the infringement before excusing it entirely. Fair use is an absolute defense and the infringer will not be liable. However, fair use has very limited application. Fair use is limited to uses for educational or research purposes, for commentary and criticism, and for news reporting. Because very few businesses would qualify for a fair use defense, and because TomTom in particular does not have any foreseeable “fair” uses, this complex topic will not be further discussed.
Copyright on the Internet
When it comes to the internet, copyright infringement is pandemic. Just about anything can be found online, and as long as a digital copy is sufficient, it can usually be found for free. Music enthusiasts can build extensive libraries without spending a dime. Presenters, be they at corporate meetings or in a tenth grade English class, can add pizzazz to their slides with a simple Google Image search. Bloggers can find literally hundreds of other blogs on their topic from which to borrow articles. Did the meeting run right through last night’s episode of True Blood? With enough diligence it can be found somewhere online – especially if the searcher speaks a foreign language.
With so much access to copyrighted works, and much of that access being free, there can be some ethical dissonance when it comes to copyright. A person who would never walk out of the music store with an unpaid-for CD in her purse will not think twice about downloading music from a peer-to-peer program. Whereas the presenter would not cut a picture out of a book to paste onto poster board, it is so easy to copy and paste from the internet that copyright may not even be considered. The bad news is, whether or not it is considered, copyright most definitely applies to online content.
Individual consumers downloading copyrighted works for their personal use are playing with fire. Just ask Jammie Thomas. In a much publicized case, Ms. Thomas was sued by the Recording Industry Association of America for illegally downloading 24 songs. The jury first found against her in the sum of $222,000 before a jury on retrial of the case awarded damages in the amount of $1.92 million. Though the final sum was ultimately reduced to $54,000, it is doubtful the lawsuit was worth saving the $24 it would have cost to download the songs legally. It is even more unwise to incorporate online content into commercial products, be that product a book, an advertisement, or some type of service. Because of the public nature of the use, the content is more likely to be discovered by the original author.
Though the copyright analysis for online works is largely the same as for offline works, it is important to take note of a few special considerations:
- Foreign works: Many people believe copyright only applies to works published in the United States, and it is true that all of the advice given above pertains to U.S. law in particular. However, just because a work is found on a foreign website does not make it fair game. The United States is a member of several international treaties related to intellectual property rights. The one most relevant here is the Berne Convention. Signatories to the Berne Convention have agreed that a citizen of any member country may enforce his domestic copyright abroad in any other member country. That means that even if the work is by a foreign author, if that work would qualify for copyright in the United States had that author been American then the author could still enforce his rights in the United States if his country signed the Berne Convention. As a rule of thumb, the safest approach is to treat all online content as if the copyright could be enforced in the United States.
- Public domain works: The internet is a wonderful resource. Besides downloading music (legally), catching up on television shows (legally), or reading current news and literature, classic literature may be found as well. The entire written works of Shakespeare, for example, can be accessed for free online from various sources. Considering Shakespeare has been dead for almost four hundred years, none of his works are subject to copyright. However, though the dialog in Hamlet can be freely copied from Shakespeare, it may not be freely copied from every source. The author of the website may still have copyright in the exact layout of the page and any images added to the work. The author may also have copyright in his translation: though Hamlet is written in English, a modern version would read quite differently. As is popular with Shakespearean works in general, any annotations to help explain the text to the reader would also be copyrightable by the author. Online users must be careful even when they know the underlying work is not subject to copyright so that they do not take more than the original, public domain work.
- The Creative Commons license: Since 2001, Creative Commons has been helping authors publish their works with fairly non-restrictive licenses. Licenses range from simply requiring attribution to denying use for commercial purposes. The idea behind the licenses is that the authors want the content to be freely disseminated, but do not want to be taken advantage of. There exists a common misconception that when encountering a Creative Commons license the potential thief magically becomes a licensed borrower. Always check to make sure the intended use for the content is allowed. Perhaps an article can be copied word-for-word onto another website, but it cannot be restricted to paying members.
Taking Factual Information From The Competition
As noted above, facts are not copyrightable. The case perhaps most often cited for this proposition is Feist Publications Inc. v. Rural Telephone Service Company, 499 U.S. 340 (1991). Rural Telephone was a utility company that published region-specific listings. Id. at 342. Feist was the publisher of a multi-regional directory. Id. at 343. When Rural refused to license its listings to Feist, Feist went ahead and copied the listings, including four fake residents, into its own book without permission. Id. Rural Telephone has a copyright registration in its book, so it sued Feist for infringement.
To begin its analysis, the Supreme Court noted: “That there can be no valid copyright in facts is universally understood. The most fundamental axiom of copyright law is that ‘[n]o author may copyright his ideas or the facts he narrates.’” Id. at 344-45 (citation omitted). This truth is so universally accepted that Rural Telephone conceded it. Id. Though facts are not copyrightable, copyright does cover compilations of facts. Id. at 348. The court is careful to point out, however, that it is not the facts themselves that have been protected, but rather the original elements of the compilation – original choices made by the author as to which facts to include, the order in which they would be arranged, etc. Id. at 348-49. No matter how original the expression of the facts may be, another person may copy the underlying facts without liability. Id. This remains true even though the second compiler is creating a competing work. Id. at 349.
A map and a phonebook are quite similar. Though represented graphically, a map is merely a compilation of facts. Luckily, courts deciding map infringement cases have agreed with that assertion. In deciding Streetwise Maps, Inc. v. VanDam, Inc., a judge in the Second Circuit wrote that “street locations, landmass, bodies of water and landmarks depicted in a map are physical facts, [and] the only material in a map capable of copyright protection-and thus demanding comparison-is original material.” 159 F.3d 739, 747 (2d Cir. 1998) (citing Feist); see also City of New York v. GeoData Plus, LLC, 537 F. Supp. 2d 443 (E.D.N.Y. 2007). Thus, that the two maps contained the same information did not create infringement. Infringement would require that the defendant had copied a photograph of the map or the copyrightable elements of the plaintiff’s map: colors, fonts, non-standard symbols, etc.
It is prudent for large and small businesses to identify the works which they own and take steps to protect the works. If your business has any challenges or would like to create a Confidentiality Plan for your business confidential information, whether subject to copyright or not, please let us know.
If your company requires assistance in developing a Copyright Policy on products it develops, or a Confidentiality Plan, please contact Hurley Stanners & Matsko LLC at (708) 848-0800 for further information.