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In counseling businesses and reviewing their business materials, we find that copyright is the least understood and most frequently ignored form of intellectual property protection. Many businesses do not even realize that they are creating or using copyrighted works on a regular basis. Copyright law protects original works of authorship like books, songs, computer software and paintings. Trademarks, in contrast, are brand names used to distinguish one company's product or products from those of a competitor. Patents protect new or novel inventions or processes. The same item can, in theory, be subject to legal protection as a copyrighted work (the expression), a trademark (the name), and sometimes, a patent (the invention). The broadest and most open category is copyright, since one can claim copyright in: (1) literary works; (2) musical works: (3) dramatic works; (4) choreographic works; (5) pictorial, graphic and sculptural works; (6) motion pictures and other audiovisual works; and (7) sound recordings.

A Copyright Owner's Exclusive Rights

Subject to certain limitations, a copyright owner has several exclusive rights regarding his or her original work of authorship. These exclusive rights include among other things, (1) the right to copy the work' (2) the right to distribute the work; and (3) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, the right to perform the copyrighted work publicly. Any one who violates any of the exclusive rights of a copyright owner infringes the owner's copyright. The author of a work of visual art has additional rights which many people overlook. First, the author of a work of visual art like a painting or sculpture has the right to claim authorship in the work. He or she can also prevent the use of his or her name as the author of any work of visual art that he or she did not create. 17 U.S.C. § 106A. Likewise, the author of a visual work of art can prevent intentional distortion or mutilation of the work as well as destruction of a work of recognized stature. These rights expire when the author of the work of visual art dies. 17 U.S.C. § 106(d)(1).

When Does Copyright Protection Begin?


Copyright protection begins when an original work of authorship is "fixed" in any tangible medium of expression. In essence when you put pen to paper and original text appears, a copyright exists. Copyright protection exists for both published and unpublished works, for both two- and three- dimensional works, and for derivative works based upon an original copyright work.

How Long Does Copyright Protection Last?


Copyright is a lengthy form of protection. Most works are protected for (1) the life of the author plus fifty years, or (2) in the case of works made for hire, seventy-five years from the date of first publication, or (3) one hundred years from the year of its creation, whichever expires first. Trademark protection, on the other hand, endures only so long as the trademark is in actual use. There are also limits on patent protection: a grant of patent is for a term generally beginning on the date on which the patent issues and ending 20 years from the filing date of the underlying U.S. patent application.

Requirements for Copyright Protection


The Copyright Act imposes only three basic requirements in order for a work to qualify for copyright protection and be eligible for copyright registration. First, the work must be original, that is, not copied from another source. Baker v. Selden, 101 U.S. 99, 102 (1879). Second, the work must consist of "expression," not just "ideas." Third, the author must "fix" the work in a "tangible medium of expression . . . from which [it] can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device." 17 U.S.C. § 102(a). Most written materials, including publications, photographs, videotapes, etc., probably meet these three basic qualifying requirements. Businesses should consider copyright protection for all their past, current and future written or graphic materials. You may not be able to protect some materials under copyright for technical or legal reasons. Nevertheless, businesses can certainly make advance plans for copyright protection with every new project.

Work for Hire Issues

One reason to consider copyright protection before starting any new project is that every copyrighted work has an "author." The author is the person who creates work and is most often the person who owns the copyright. An employer is automatically the "author" of any work prepared by an employee in the ordinary course of his or her employment. Unless there is a written agreement to the contrary or evidence that the employee was acting outside the scope of his or her employment, the law presumes that the employer owns the employee's work as a work made for hire. The law treats independent contractors or other nonemployees differently for copyright purposes. If a business wants to claim ownership of copyright in a work created by a nonemployee or group of nonemployees, it should have a written "work for hire" agreement. Many companies ignore this requirement and as a result, they do not own the copyright in work commissioned from independent contractors or other nonemployees. To avoid this unhappy result, we recommend that a written agreement be used with all nonemployees and for all projects. Any agreement with a nonemployee must specifically provide that the commissioned work is a "work made for hire" and that copyright belongs to the contracting business. It is useful to have a separate "work for hire" agreement for each new project, since open-ended agreements may not be effective. If there is no effective written agreement, the odds are great that a court might find that the nonemployee is the "author" and owns all rights in the work. At best, the contracting party might have an implied license to use the work. If necessary, the nonemployee can execute a copyright assignment after finishing the work. Of course, it is often more difficult to persuade independent contractors to relinquish their rights after they realize the contracting party's dilemma. This is especially true when it appears that the work has (or may have) significant economic value. In setting any new project with any third party, including independent contractors and outside consultants, we recommend that you request a work for hire agreement. Attached as Exhibit "1" is a sample work for hire agreement in letter format. You can incorporate this language into a formal agreement. Again, the parties should execute this agreement before work begins on any project. Even if the same consultant works on multiple projects, you need a separate work for hire agreement for each work.

Copyright Notice


Besides securing work for hire agreements with third parties, we recommend that companies include a copyright notice on all new written materials. Until March 1, 1989, U.S. law required that a copyright notice be displayed on all publicly distributed copies of a work. Failure to comply with the notice requirements for pre-March 1989 works means that for the most part, and strictly from a copyright perspective, a work is in the "public domain." On March 1, 1989, the United States implemented certain amendments to the Copyright Act, bringing this country into compliance with an international copyright treaty known as the Berne Convention. Once the United States joined the Berne Convention, Congress eliminated the copyright notice requirement as a condition for copyright protection. Again, there is no copyright notice requirement, except for works distributed before March 1, 1989. However, businesses should include copyright notices, since the notice is a reasonably strong deterrent against infringement. Moreover, if the copyright owner includes a copyright notice and someone copies the work, there is no "innocent infringement" defense. The Copyright Act requires that copyright notices follow a specified form. An acceptable copyright notice consists of (1) the symbol © (the letter "c" in a circle), or the word "Copyright," or the abbreviation "Copr."; (2) the year of first publication; and (3) the name of the copyright owner. 17 U.S.C. § 401. You may add "all rights reserved" even though this is not a requirement. A typical copyright notice would take the following form: © 1998 Venable, Baetjer, Howard & Civiletti, LLP. All rights reserved.

Copyright Registration


Copyright registration is a prerequisite for any action for infringement involving works of U.S. origin. To obtain a copyright registration, you file a simple two-page form, attach a photograph or copy of the work and submit a $20 fee. The Copyright Office generally issues a certificate of registration within two or three months. Expedited registration is also possible, especially when litigation is imminent. An application for registration with a request for special handling takes about ten (10) working days and requires a higher filing fee. It is best not to delay copyright registration for any new work. In a civil action where the registration is filed before the date of the infringement or within three months of first publication of the work , the copyright holder can secure injunctive relief. The copyright holder may also elect to recover either statutory or actual damages and profits of the infringer. 17 U.S.C. §§ 502 and 504. If the copyright owner does not register the work before the date of the infringement (or within three months of first publication), the court will not award statutory damages or attorneys' fees. Of course, the court can order actual damages and injunctive relief. 17 U.S.C. § 412.

Establishing a Prima Facie Claim of Infringement

To establish a prima facie claim of copyright infringement, a plaintiff must prove two basic elements: (a) ownership of a valid copyright in each infringed work, and (b) "copying" by Defendants (or violation of another of the exclusive rights provided to a copyright owner by the Copyright Act). Anyone who violates any of the exclusive rights of the copyright owner is an infringer of the copyright. 17 U.S.C. § 501(a).

a. Ownership

Most often, you show ownership through certificates of copyright registration. The Copyright Act specifies that in any judicial proceeding, a certificate of copyright registration made before or within five (5) years of first publication constitutes prima facie evidence of the validity of the copyright and of the facts stated in the certificate. 17 U.S.C. § 410(c). Where a plaintiff presents a registration certificate, the burden shifts to the defendant who must present evidence of copyright invalidity, a license, or another defense.

b. Proof of Infringement

It is axiomatic that there can be no infringement unless there has been a copying of the copyrighted work, or violation of another of the copyright owner's exclusive rights. You prove copying or violation of the exclusive rights of a copyright owner by showing first, that the defendant had access to the copyrighted work. Next, you show that the defendant reproduced or distributed copies that are substantially similar to the copyrighted work. The Copyright Act defines "copies" as "material objects . . . in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term 'copies' includes the material object, other than a phonorecord, in which the work is first fixed." 17 U.S.C. § 101§ (1978).

1) Access

Direct evidence of access to the copyrighted work is often not available. Most plaintiffs prove access through circumstantial evidence. A court may infer access when there is evidence that the defendant played a role in the creation or manufacture of both the infringed work and the infringing copies. A court may also presume access from the fact that the copyrighted work at issue is readily available on the market, or that the defendant knew that the copyrighted work was not readily available on the market. Moreover, a plaintiff may show access indirectly by evidence of wide dissemination of the copyrighted work. When the copies are identical or there are striking similarities between expressive elements, access is easy to prove. In all events, the evidence must establish that the defendant came across the work in question.

2) Substantial Similarity

A plaintiff must also prove substantial similarity between the copyrighted work and the infringing copies. A determination of substantial similarity between the copyrighted work and alleged infringing work requires more than mere evidence of adherence to the general idea expressed, since copyright does not extend to ideas alone. Similarity in expression is not infringing to the extent the nature of the creation makes the similarity necessary. Accordingly, you may not protect indispensable expression of generalized ideas against anything other than virtually identical copying. If the copies are close but not substantially similar in terms of protected expressions, there can be no infringement. It is simply not a violation to possess something that only comes close to being copyright infringement.

In some cases, particularly those involving counterfeits of sound recordings, motion pictures or mass marketed "off-the-shelf" computer software, the copies involved will be copies of the whole of the copyrighted work. Unauthorized literal reproduction of the whole, or substantially the whole, of a copyright work constitutes an infringement. Even when only a defendant copies only a section or part of the original work, a plaintiff can prove substantial similarity, since literal copying of even one section will, in most cases, defy coincidence. Some plaintiffs point out common errors to prove copying. Common errors reduce the statistical probability that the defendant's work is original.

Indirect copying can also be a violation of the copyright owner's exclusive rights. For example, you may infringe if you largely paraphrase a work. A copy made from an infringing copy is also an infringement of the original. It makes no difference that the pirate did not know the version from which he was copying was infringing; he at least knew that what he was copying was not his. Even if an infringer acknowledges the source from which he derived the appropriated matter, this acknowledgment will not relieve him of legal liability.

2. Effect of First Sale Doctrine On Copyright Infringement Proceeding

Because infringement can occur as a result of both unauthorized reproduction and unauthorized distribution of copies of a copyrighted work, the first sale doctrine can affect a determination of infringement.

Unauthorized distribution of a copyrighted work is an infringement because the Copyright Act provides the copyright owner with the exclusive right "to distribute copies . . . of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending," and "[a]nyone who violates any of the exclusive rights of the copyright owner . . . is an infringer of the copyright." The legislative history of the Copyright Act makes it clear that "any unauthorized public distribution of copies . . . that were unlawfully made would be an infringement.

The copyright owner's distribution right is akin to an exclusive right to control the first publication or first public distribution of copies or phonorecords of the work. This concept, known as the "first sale" doctrine, gives the copyright owner the right to sell or publicly distribute particular copies or phonorecords of the copyrighted work. The distribution right ceases once the owner has parted with those particular copies or phonorecords. The Copyright Act states that the owner of a particular, lawfully made copy or phonorecord is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.

The first sale doctrine applies only where the possibility exists that the person processing the copyrighted work obtained it lawfully. In other words, if you own a lawfully made copy, you have the right to sell that copy to another party. The only exceptions are sound recordings and software, which you may not rent or lease without the copyright owner's consent. There can be no lawful distribution of pirated or counterfeit copies of a work because the copyright holder cannot, by definition, part with legal title through a first sale.

The first sale doctrine is a defense in copyright infringement cases. Sometime a defendant presents evidence that the copies in question are legal and that he or she owned them. The burden shifts to the copyright owner to demonstrate that the copies are illegal or not owned by the defendant.

Remedies for Infringement

Copyright law provides civil and criminal remedies against infringers. Most copyright owners pursue infringement actions as civil matters in federal court. Statutory damages, which most copyright holders elect, range from $500 to $20,000 for each non-willful infringement and up to $100,00 for each willful infringement. 17 U.S.C. § 504(c). Some plaintiffs seek actual damages, and when this occurs, the court will add infringer's profits to the award.

To establish the infringer's profits, the copyright holder presents proof of the infringer's gross revenue. The burden then shifts to the infringer to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work. 17 U.S.C. § 505. This makes infringement litigation economically feasible.

Most copyright plaintiffs request injunctive relief, including temporary restraining orders or preliminary injunctions. The injunctive relief available under the Copyright Act is effective throughout the United States. 17 U.S.C. § 502(b). A court can also order the seizure and impoundment of infringing items. Seizure orders often extend to the equipment used by the infringers (for example, screens, diskette duplicators) and sometimes even the trucks, vans and cars used to transport infringing goods. As part of a final judgment or decree, the court will frequently order the destruction or forfeiture of all infringing copies or phonorecords as well as all plates, molds, tapes, film negatives and other articles used for reproduction. 17 U.S.C. § 503(b).

Additional remedies may be available when an infringer creates the copies overseas and imports them into the United States. Section 602 of the Copyright Act prohibits the importation of unauthorized copies of a work. 17 U.S.C. § 602. Any unauthorized "articles" imported into the U.S. are subject to seizure and forfeiture by the Customs Service. 17 U.S.C. § 603.

Copyright infringement is also a crime. Criminal copyright infringement is defined under Title 17 of the United States Code as willful infringement for the purpose of commercial advantage or private financial gain. 17 U.S.C. § 506(a)(1). Criminal copyright infringement also includes the willful reproduction or distribution by electronic means during any 180-day period, of 1 or more coies of 1 or more copyrighted works, which have a total retail value of more than $1,000. 17 U.S.C. § 506(a)(2). A five year prison term and a fine of up to $250,000 can be imposed. 18 U.S.C. § 2319(b). Where the offense is a second or subsequent offense, the term of imprisonment increases to ten years. 18 U.S.C. § 2319(b)(2).

Conclusion


Businesses create and use copyrighted works on a regular basis. Those who ignore copyright protection are missing tremendous opportunities and perhaps, placing themselves at great risk. We encourage all clients to consider copyright protection in advance and not wait for problems to develop.

WORK FOR HIRE AGREEMENT (LETTER FORMAT)
(Date)
(Name and Address of Commissioned Party)

Dear _________________:

The purpose of this letter is to confirm that ABC Company, Inc. ("ABC") has specially ordered or commissioned you to create or prepare a work consisting of (describe project in detail). You agree that this specially ordered or commissioned work is a "work made for hire," and that ABC, as the entity for whom or work the work is prepared, shall own all right, title and interest in and to the work, including the entire copyright in the work. With respect to any work of visual art, you expressly waive any and all rights of attribution and integrity with respect to any and all uses of the work.

You further agree that to the extent the work is not a "work made for hire," you will assign to ABC ownership of all right, title and interest in and to work, including ownership of the entire copyright in the work. You also agree to execute all papers necessary for ABC to perfect its ownership of the entire copyright in the work.

You represent and warrant that the work you create or prepare for ABC will be original, will not infringe upon the rights of any third party, and will not have been previously assigned, licensed or otherwise encumbered. As compensation for your services, ABC will pay you _________ Dollars ($ ________) upon satisfactory completion of the work or before (insert date if applicable).

If you agree with this understanding, please sign and return one copy of this letter. Sincerely, I agree with the above understanding.

Signature: ________________________
Title ________________________
Date: _____________________________________________ 

A separate letter agreement should be prepared for each project or work created.