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3. COPYRIGHTS



3.1 What Is a Copyright?
3.2 How Are Copyrights Important?
3.3 What Is Copyrightable?
3.4 How is Copyright Protection Obtained?
3.5 Enforcement of Copyright
3.6 The Digital Millennium Copyright Act
3.7 Protection Strategies
3.8 Summary

3.1 what is a copyright?^

A copyright is a form of intangible property that provides protection for the creative expression of ideas. Only the expression of the idea is protected. No protection is provided by copyright for the idea itself (although the idea may be protectable by patent, trademark or trade secret laws). For example, the blueprints for a home powered by a wind turbine would be copyrightable, but the copyright would not extend to the manner in which the wind turbine is incorporated into the home as a power plant.

Historically, copyrighted works consisted principally of works of art, such as paintings, songs, and plays. As the information age has matured, however, copyrights have been relied upon to protect catalogs, instruction manuals, seminars, computer software, and data bases.

3.2 how are copyrights important?^

Copyrights are statutory, and a copyright gives the owner five categories of exclusive rights -- the rights of reproduction, adaptation, public

distribution, public performance, and public display. Also included in the adaptation right is the right to prepare other works, called "derivative works," based on the original work. Furthermore, in the case of software programs and sound recordings, the owner has the additional right of restricting the rental of lawful copies. The copyright owner may elect to license others to exercise the rights provided by the copyright.

The copyright owner may elect to grant any of these rights to others. This is generally done in a contract which provides for the payment of royalties to the copyright owner.

3.3 what is copyrightable?^

In the Copyright Act, Congress stated that any "original work of authorship" fixed in any "tangible medium of expression" is copyright-able. 17 U.S.C. ß 102(a). Congress has specifically provided that certain things are not copyrightable. These include "any idea, proce-dure, process, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied."

The copyright statute requires that the work in which a copyright is sought must be original. Hence, painstakingly repainting the Mona Lisa to produce an exact copy of the original, although requiring a great deal of talent, would not produce a copyrightable work. In contrast, a child’s crayon portrait of the Madonna would be copyright-able.

Virtually all creative works become "fixed in a tangible medium of expression." Consequently, this element of the statutory test is hardly ever at issue. A painter’s canvas, a piece of paper, a cassette tape, and a compact disc are all examples of a tangible medium. An unrecorded speech, given extemporaneously, would be one example of a work not fixed in a tangible medium of expression, and as such, would not be afforded copyright protection.

The sole exception to the requirement of "fixed in a tangible medium of expression" exists for live musical performances. Under "anti-bootleg-ging" statutes live musical performances do not have to be fixed in tangible form to be protected under copyright law. The performer’s consent is required for any fixation of sounds or images during the performance.

Although rights under copyright law are obtained automatically, there are some limitations to the scope of copyrights and to ownership of copyrights. Three principal limitations are independent development, fair use, and works made for hire. Each such limitation is discussed briefly below:

INDEPENDENT DEVELOPMENT^

Copyrights protect only from copying. Hence, if someone does not "copy" a copyrighted work, there is no copyright infringement. Although an accused infringing work may be remarkably similar to a copyrighted work, if the accused work was truly developed independent of the copyrighted work, the copyright owner has no recourse.

As you might imagine, a copyright infringer rarely admits to copying a copyrighted work. As a result, the courts will use a two-part test to assist the copyright owner in proving copyright infringement. If a copyright owner can prove that the accused infringer had access to the copyrighted work and that the accused work is "substantially similar" to the copyrighted work, then the courts will infer copying.

FAIR USE^

The Copyright Act provides that, under certain circumstances, making copies of a copyrighted work constitutes "fair use" and can be done without the permission of the copyright owner. Congress has specifi-cally provided that reproducing the copyrighted work for "purposes such as criticism, comment, news reporting, teaching, scholarship, or research, is not an infringement of copyright."

Unfortunately, determining whether a particular instance of copying constitutes "fair use" can be highly complex. Indeed, this is one of the most frequently litigated issues in copyright law.

Congress has set forth four factors that are to be considered in deter-mining whether copying falls within the fair use exception:

1. The purpose and character of the use: If the purpose for copying was for non-profit use, rather than for a commercial use, fair use is more likely to be found.

2. The nature of the copyrighted work: The fair use exception is more readily available for published works than unpublished works that the author is trying to keep secret. Similarly, fair use is more likely to be applied to factual works than to artistic ones.

3. The amount and importance of the portion used: Fair use is more likely to be found when small, relatively insignificant aspects of the copyrighted work are copied.

4. The effect of the use upon the potential market for or value of the work: This is generally the most important factor. Fair use is more likely to be found if the copying has no commercial effect on the marketability of the copyrighted work.

Although the fair use analysis depends on the particular facts of the case, a rule of thumb is that if the alleged copy provides a market substitute for the copyrighted work, the copying is not likely to be considered a fair use.

WORK MADE FOR HIRE^

The other primary source of litigation in the copyright field arises out of the "work made for hire" doctrine. Simply stated, the Copyright Act provides that if an employee creates a copyrightable work in the course of employment, the work is considered a "work made for hire" and the copyright is owned by the employer. On the other hand, if the "employee" is really a subcontractor, such as an outside consultant, or if the work is created outside the employee’s scope of employment, the copyright does not belong to the employer.

Many employers are disturbed to learn that after they have paid thousands of dollars to a consultant for the creation of forms, a com-puter program or a book, they do not own the copyright to that work. This problem can easily be avoided by entering into a written contract which specifies that the copyright belongs to the employer. A verbal agreement is insufficient because the Copyright Act requires that such agreements be in writing.

3.4 how is copyright protection obtained?^

Unlike a patent, rights are obtained under the Copyright Act automati-cally. Once a work becomes "fixed" in a "tangible medium of expres-sion," rights under the Copyright Act attach.

A copyright notice is no longer required. Prior to March 1, 1989, proper copyright notice was a condition for copyright protection. Even minor defects in the copyright notice could result in loss of rights. Although works created after March 1, 1989 no longer require notice, it is still a good idea to include a copyright notice on all copyrightable works.

Although certain rights accrue automatically, the full spectrum of rights under the Copyright Act are only available through prompt formal registration of the copyright with the United States Copyright Office. In addition to enhanced rights, additional remedies for copy-right infringement are granted the owner of a registered copyright.

Registration of a copyright is accomplished by submitting a Copyright Application along with two copies of the best edition of the work to the United States Copyright Office in Washington, D.C. The Copyright Office reviews the application to ensure that it is complete and that the work constitutes copyrightable subject matter. In most cases, the Registration Certificate is issued within two to three months from the filing date of the application.

Generally, copyright protection extends for seventy years beyond the death of the author. If the author of the work is anonymous or is a business entity, then the copyright protection extends for ninety-five years from the year of first publication, or 120 years from the year of creation, whichever expires first.

3.5 enforcement of copyright^

Many copyright disputes can be resolved simply by initiating a dialog between the parties. Now more than ever, people inherently sense that copyright infringement is illegal. Consequently, most people will willingly cease infringing activities when the issue is brought to their attention.

Not all copyright infringement issues are black and white. Occasion-

ally situations arise when formal dispute resolution tribunals must be utilized to settle disputes. To keep the costs for resolving disputes to a minimum, it may be advisable, in the appropriate situation, to use "alternate dispute resolution" methods rather than spend the time and money required for a protracted battle in the courts. Popular alternate dispute resolution methods include arbitration and mediation.

On occasion, however, it is necessary to pursue relief through the courts to protect and preserve your rights. Recently, highly publicized cases, such as A&M Records v. Napster, Inc., have highlighted the potential complexity of copyright law and the role of attorneys and courts in the proper settlement of copyright disputes. Congress has specifically provided that copyright infringement cases can only be filed in federal court. Because the federal court docket is substantially less crowded than that of the state courts, having access to federal court can be a great advantage.

Before filing a copyright infringement action, your copyright must be registered with the United States Copyright Office. For this reason, the Copyright Registration Certificate is often referred to as "the key to the courthouse." If you decide to file a lawsuit and your copyright is not registered, the Copyright Office has an expedited registration procedure in place to accommodate you.

It is not necessary nor is it advisable to register every copyrightable work. However, by registering the work before an infringement occurs, the Copyright Act provides for the recovery of statutory damages of at least $750 and up to $30,000) for each infringing work in addition to a possible award of attorneys fees and costs of suit. If the court deter-mines the infringement has been "willful," an award of up to $150,000 is authorized by the statute. If the work is not registered, damages may be limited to those lost profits which can be proved at trial or the actual profits of the infringer.

The court also has power to grant injunctions to prevent further copying of the work. Such injunctions may be temporary or final.

The court also has the power to impound copies that are claimed to have been made or used in violation of the rights of the copyright owner. Articles that may be used to reproduce copies may also be impounded. The court may order the destruction of illicit copies and materials used to reproduce the copies.

3.6 the digital millennium copyright act^

The Digital Millennium Copyright Act (DMCA) addresses many emerging issues in copyright law and was signed into law in 1998. Only a cursory review of the most important changes in copyright law is possible in this handbook.

One of the primary purposes of the DMCA was to bring United States copyright law into conformity with various worldwide treaties regarding copyright law. To this effect, the copyright law was amended to provide greater protection for original works created outside of the United States.

Another important part of this legislation was directed to technological advancements and their relation to copyrighted material. Without affecting the rights, remedies, limitations, or defenses of traditional copyright law, the DMCA was designed to prohibit devices or services that provide unauthorized access to copyrighted material by circum-venting technological measures of preventing copyright infringement. A complete exception to the anti-circumvention law was included for law enforcement and other governmental activities. Also included were limited exceptions for nonprofit libraries, archives, and educational institutions. Partial exceptions for reverse engineering, encryption research, protection of minors, protection of personal privacy, and security testing were also included in the DMCA. Copyright Manage-ment Information was also covered in this section of the DMCA, prohibiting the removal, alteration, or falsification of Copyright Management Information.

The next major section in the DMCA was designed to further limit the liability of online service providers. The liability of service providers is limited for four categories of activity: 1) transitory communications; 2) system caching; 3) storage of information on systems or networks at direction of users; and 4) information location tools. Each of these categories is subject to its own rules and qualifications but there are some aspects that are general to all of the limitations. If the service provider qualifies for a limitation, he is entitled to a complete bar on monetary damages and the injunctive relief available is also limited in a variety of ways. To qualify for any of the limitations on liability, an entity must first qualify as an "online service provider." This term was defined broadly in the DMCA and most companies with an online

presence will qualify. The service provider must meet two additional requirements. The provider must implement a policy of terminating in appropriate circumstances the accounts of members who are repeat copyright infringers and it must accommodate standard technical measures that are employed to protect copyrights.

Other sections of the DMCA address copyright issues regarding computer maintenance or repair and provide for copyright protection of boat hull designs. Still other sections modify existing law to accom-modate current digital music broadcasting technologies.

The Digital Millennium Copyright Act is the first of what will certainly be many legislative attempts to keep up with rapidly changing technology. It provides for civil and criminal remedies for copyright owners and it is considered by some to be a good effort to balance the rights of copyright owners and users. As is the case with all new laws, the specifics of these new laws and the changes to the law will be further clarified as the law is applied.

3.7 protection strategies^

MINIMAL APPROACH^

At a minimum, all copyrighted works which are distributed should include a copyright notice. It is not necessary to register the work with the Copyright Office before placing a copyright notice on the work. An acceptable copyright notice includes three elements: (1) the word "Copyright," the abbreviation "Copr." or the symbol "(c)"; (2) the name of the copyright owner, e.g., XYZ Corp.; and (3) the year of first publication of the work or the year of creation in the case of an unpublished work. It is also preferable to include the words "All Rights Reserved." Thus, for a book first published in 2004 by XYZ Corpora-tion, the copyright notice would read:

(c) 2004, XYZ Corp. All Rights Reserved

The copyright notice should be placed where it reasonably will give notice to the public.

Including a copyright notice will at least provide those who see it with notice that you consider your work protected by the copyright laws. In some cases, that will provide sufficient deterrent to prevent copying.

Because the cost to register a copyright is relatively nominal, it is also recommended that any significant works be registered with the United States Copyright Office. If a work is copied and litigation for copyright infringement must be commenced against the infringer, having previously registered the works will provide advantages having value far in excess of the cost of registration.

Of equal importance to protecting copyrightable material is ensuring that the copyrights of others are respected. The avoidance of disputes is wise because litigation is expensive irrespective of who ultimately prevails. Developing a frequent consultation dialog with legal counsel regarding new products and marketing strategies is the most cost effec-tive means for avoiding problems. By identifying potential problems early, design changes can be incorporated or permission sought before a company commits to a course of action which may infringe the copyrights of others.

MODEST APPROACH^

For companies whose primary product lines depend principally on the copyright law for their protection, a more aggressive approach in pursuing copyright protection is warranted. For instance, a software development company should consider registering each major version of its software and user manuals.

Potential infringements should be investigated thoroughly to determine whether copyrighted works are being pirated. Often, such disputes can be quickly resolved simply by notifying the offending company of the impropriety of their actions.

When copyrights play an important role in a company’s legal portfolio, employment contracts should be audited to ensure that they discuss ownership issues and the employees’ duty regarding copyrights. Of particular importance is the relationship the company has with persons hired as non-traditional employees. In some circumstances, the copyrights in works created by these persons are not owned by the company because of the "work made for hire" doctrine. Thus, the company should have a written agreement with all such persons which specifically address copyright ownership.

AGGRESSIVE APPROACH^

An aggressive approach to copyright protection would dictate that all copyrighted works within a company’s product line be registered with

the United States Copyright Office. This might include computer software, instruction manuals, forms, art work accompanying a pack-age design and any other features of a product which embody creative expression.

The implementation of a plan to police for copying in the market can also be instrumental in preventing the loss of company revenue through illegal copying. Some industries have organizations which provide this function. For example, in the software field, the Software Publishers Association (SPA) and the Business Software Alliance (BSA) provide a degree of enforcement for many instances of software piracy. In some instances, it may be necessary to retain a private investigation firm to monitor or verify infringing activities.

3.8 summary^

Copyrights are designed to protect creative expressions. Although all creative works have some inherent protection under modern copyright law, registration of the copyright in the creative work is necessary for full protection and for some of the most appropriate remedies. Technological advancements have made infringing use of copyrighted material much easier and much more common. A consultation with a qualified intellectual property attorney is recommended to ensure the best protection for your copyrightable material.