In a shareable world, copyright owners have long faced problems with online piracy and the resulting abuse of their intellectual property. But with the ubiquity of smartphones, it has become easier than ever to infringe copyright through using and exchanging pictures, logos and even clips of movies and TV shows for commercial purposes without any permission.
In an effort to legislate this rapidly changing legal area, Congress passed the Digital Millennium Copyright Act (DMCA) in 1998. The DMCA and its offspring, the Online Copyright Infringement Liability Limitation Act (OCILLA), introduced a “notice and takedown” process, where copyright owners who learned of infringing activity could notify service providers, such as search engines, who are then obligated to remove the infringing material. By following this process, the service provider avoids copyright infringement liability for hosting illegal material, and the copyright owners have a streamlined process to protect their rights.
Examples of the notice and takedown procedure are common. For instance, Reuters recently reported that Time Warner Inc. requested that Google remove the app Hobbit 3D Wallpaper HD from its Google Play Store. The programmer of the app allegedly used copyrighted material from the popular Lord of the Rings series, which Time Warner owns, without having obtained the rights to do so. In order for Google to find safe harbor in the protections of the DMCA and OCILLA, it had to comply with the takedown request. It is important to note that the notice and takedown procedure does not carry the force of law; just because material is taken down does not automatically mean that it was infringing. Instead, it pauses the effects of any potential infringement and provides the parties time to sort matters out. Penalties exist for fraudulent claims of copyright ownership, which helps prevent the takedown of material that was legally available.
Nevertheless, this incident leads to a question which entrepreneurs now must confront: how to use copyrighted material without creating copyright liability.
Copyright gives the creator of a work the exclusive rights to reproduce, show, license and to prepare derivative works based on the creation. At its heart, copyright is a property right, which means that it can be bought and sold like any piece of tangible property. Such transfers can be classified into at least two broad categories: the outright assignment and the copyright license.
An outright assignment transfers all the rights, title and content of a work, while a copyright license only permits a license to use a special portion of a work for a specified purpose. It is far more likely for the typical entrepreneur to need a copyright license rather than an assignment of copyright, which essentially functions as a purchase of the rights in a work. Many industries, such as the music industry, use a “compulsory” license system that sets prices for use of copyrighted material and creates a central database for all owners and users to utilize. Small and mid-sized businesses, however, will often find themselves needing to seek permission from a copyright owner in order to, for instance, reproduce a photograph on a Web site.
To get permission, seek out the copyright notice on the item you wish to use in order to determine who owns the copyright. If the owner has registered the copyright with the federal government, then the identity of the owner is available through the U.S. Copyright Office records available at http://www.copyright.gov/records/.
Once the owner has been identified, those seeking a license should prepare a report with basic information (addresses, contact person, telephone number and an e-mail address). Be aware that the prices will be different for various types of works – depending on factors such as the amount or importance of the portion of a work you wish to license, the fame of the work, the size and sophistication of the owner, or the kinds of use you wish to make.
Next, contact the copyright owner, perhaps through a written letter or e-mail, or simply a phone call. If you are able to negotiate a licensing arrangement, make sure to get the license in writing to avoid any later claims that your use was not permitted.
Following this procedure is important to avoid monetary damages for copyright infringement. U.S. copyright law permits damages up to $150,000 for infringement, but copyright owners who can prove greater damages can ask a court to provide even larger awards.
Note that not all use of copyrighted material requires permission from the owner. Exceptions for “Fair use” are commenting, criticism and teaching. As a result a teacher can show a movie in a classroom without explicit permission from the copyright owner. But fair use law is extremely complicated, and to avoid any legal issues, you should consult an attorney to determine if your planned use would qualify as fair use.
The specific copyright conflict between Warner Bros. and Google ended after Google complied with the notice and takedown procedure, illustrating the protections that large service providers have under the DMCA. But the underlying lesson is clear: for aspiring entrepreneurs who want to use copyrighted material, acquiring a license to do so is the most prudent possible decision.
Fuksa Khorshid, LLC can help you with your copyright and licensing matters. If you have any questions, please contact us at 312-266-2221.
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