Copyright Law and the Business World: Tips and Practical Advice

Copyright law awareness is a must in the modern business world. On one hand, copyright is a valuable tool for protecting important business assets. On the other, unlawful use of copyrighted material, termed “copyright infringement,” can subject a business to costly lawsuits, and ultimately to large monetary damages. In order to protect company assets and prevent copyright infringement, business owners and employees should familiarize themselves with some simple copyright law basics.

Copyright is a form of protection provided by the federal government to authors of “original works of authorship.” The purpose of copyright law is to protect the exclusive rights of authors to control and financially benefit from their works. Most people are aware that copyright protects films, music and books. However, copyright law also protects a much wider category of works which are important in the business world, including: web sites, computer programs, manuals, newsletters, technical publications and drawings, building designs, and promotional and advertising materials.

In the United States, copyright protection is free, and automatically arises when the work is created. Copyright protection becomes more powerful if the work is registered, for a small fee, with the United States Copyright Office. Registration entitles the copyright holder to more potent legal remedies, and thus, makes copyright infringement suits more economically feasible. Businesses maximize protection of valuable copyrightable assets by registering their works.

The use of a copyright notice is no longer required; however, it is beneficial because it provides notice to would-be users that the work is copyright protected. A good rule of thumb is to include the copyright symbol, the year of first publication, and the name of the owner. For example: © 2013 Company Name.

Copyright infringement occurs when an individual or business uses copyrighted material without permission. Unauthorized use includes copying, reproducing, displaying, making derivations of, or utilizing a work without authorization.

Generally, companies can use most copyrighted material under the conditions laid down by the copyright owner. For software or computer programs, for instance, companies must purchase licenses. The payment for the right to use does not give the company the right to copy the work or to re-produce and sell the work. In order to avoid infringement, additional use of the copyrighted material must be authorized and may require paying extra licensing fees or royalties.

The internet has become the Wild-West of copyright law. Copyrighted material posted online can be easily copied and used without authorization, and in fact millions of people commit copyright infringement every day. Companies should be aware that posting a work on the internet does not compromise its copyright protection. Just like any other work, if you want to use a work found on the internet, you need to comply with the conditions laid down by the copyright owner.

If an employee decides he or she wants to use a picture or part of an article for some business purpose, he or she should contact the author and secure permission. Managers reviewing work-product should double check to ensure that copyrightable material is being used under authorization. Failing to follow these safety measures can open up the company to copyright infringement lawsuits.

An example may provide clarification.  X Company needs to create packaging for a new product.  Joe Employee is assigned to the task. In order to make the packaging aesthetically pleasing, Joe searches the internet for a picture and includes it on the packaging. Joe never sought permission from the copyright owner. Sue Manager loves the packaging and approves it for production. Sue never bothers to check whether the picture is copyrighted. The new product hits the market. One month later, X Company gets a notice in the mail that it is being sued for copyright infringement. When X Company loses the copyright suit, not only will it have to remove the packaging from the market and spend  time and money re-working it, X company could also end up paying a high amount of damages, including statutory damages and the copyright owner’s attorneys fees.

There are exceptions in the copyright laws that allow copyrighted material to be used without permission in certain situations. The fair use doctrine allows small portions of a work to be used for purposes of criticism, comment, news reporting, teaching, scholarship or research. However, fair use does not apply when use of the copyrighted material leads to a commercial benefit, or affects the value of the work. The fact that companies are generally engaged in commercial, for-profit activities, limits the applicability of the fair use doctrine for them, as the doctrine is aimed more toward organizations such as libraries and schools.

The main point to be drawn from this discussion is that companies and their employees must be familiar with copyright law. A working knowledge and respect of copyright law benefits a company in two ways. First, the company can use copyright to protect its own valuable business assets. Second, the company can put procedures in place to prevent copyright infringement and resulting costly lawsuits. Although the law is complex, and availability of copyrightable material on the internet provides a host of opportunities for copyright infringement, problems can be avoided fairly simply: seek permission before you use.

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