There are several types of intellectual property rights for small business owners to be aware of, and in Part I of this series, I am going to talk about the basics of copyright, provide an overview of common copyright misconceptions, and share some practical pointers for small businesses.

Posted in Property Insurance on Sunday, December 9, 2018

 A brief guide on avoiding copyright and trademark issues when naming and promoting your business.

Part I – Copyright Protection & Common Misconceptions

In my role at Professional Solutions, I advise business units and our marketing team on a wide variety of regulatory and legal issues, including intellectual property issues that come up from time to time. While I am by no means an intellectual property expert, I have noticed some areas of unfamiliarity and common misconceptions regarding intellectual property that have come up both related to our companies’ operations and the operations of our small business customers. 

There are several types of intellectual property rights for small business owners to be aware of, and in Part I of this series, I am going to talk about the basics of copyright, provide an overview of common copyright misconceptions, and share some practical pointers for small businesses. 

Copyright Basics

Federal copyright law protects “original works of authorship fixed in a tangible medium of expression . . . ^”[1] Types of works that receive copyright protection include literary works, musical works, photographs, and audiovisual works.^[2] However, there is no copyright protection for works of the US government^[3] or for ideas, procedures, processes, systems, methods of operation, concepts, principles, or discoveries.^[4]

In general, copyright protection is automatic and gives the author exclusive rights to reproduce and distribute the work.^[5] Copyright owners may bring a claim for infringement against others who copy their works^.[6] The remedies for infringement can include statutory damages of up to $150,000 per work for willful infringement.^[7]

An exception to a copyright owner’s exclusive rights in a work and a defense to a claim of copyright infringement is fair use.^[8] The fair use exception allows for “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.”^[9] There are several factors taken into consideration when determining whether a use of another’s work is fair use: 

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; 

(2) the nature of the copyrighted work; 

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and 

(4) the effect of the use upon the potential market for or value of the copyrighted work^.[10]

Generally, commercial uses of another’s work are less likely to be fair uses.^[11]

Four Misconceptions Regarding Copyright

“I thought it was not copyright infringement because . . .”

1. “. . . the content is available for free online.” Even when content is freely accessible on the internet, it does not mean that that it is free to use without the owner’s permission. It is safe to assume that almost everything online is subject to copyright protection.
2. “. . . I cited the source.” While they are related concepts, copyright infringement is different than plagiarism. You can still infringe an owner’s copyright even when you cite your source. 
3. “. . . my business paid for the material.” Even if you pay for content, you must look at the terms of the license/subscription agreement to determine what is permissible. Certain uses (e.g., sharing, posting online) may be prohibited by the terms and conditions. 
4. “ . . .  I only shared it with my employees and business partners.” Copying and sharing others’ content within your business (e.g., via email, photocopies, etc.) for internal use is still infringement. Several companies recently learned about this misconception the hard way after a publisher of industry newsletters sued them for copyright infringement. 

After reading about the basics of copyright and a few of the misconceptions, you may be thinking — “Okay, but how does this apply to my small business?” Some practical pointers, include:

1. When in doubt, ask for permission. If you are uncertain whether you are able to use someone else’s content, seek permission. Many authors/copyright owners are happy to let you redistribute their materials to your employees or business associates. Some will even allow you to use their content in your marketing! I have sent several emails to owners asking whether I could redistribute their material to others. 
2. Find materials in the public domain. Works in the public domain are not protected by copyright law and can be freely used. A great resource for determining whether a work is in the public domain is available through the Cornell University Library Copyright Information Center. Also, to see how you could have fun with public domain works, I recommend checking out late night host James Corden’s renditions of public domain songs with celebrity guests on his show!
3. Obtain a license to use copyrighted works. There are times when you will need to purchase a license to use copyrighted material (e.g., a stock image gallery). Moreover, after obtaining the appropriate licensing rights, make sure you understand the scope and the terms of the licensing agreement.  
4. Ensure adequate oversight of third parties. Vet your service providers and obtain assurances that any content they create for you or allow your business to use does not infringe on the intellectual property rights of another. If you hire an independent contractor to create content for you, you may need to work with your attorney to create a written agreement clarifying ownership of the content (called a work made for hire provision, which becomes even more complicated if your business is in California).
5. Be cautious about fair use. While fair use is a defense against infringement, if you desire to use or adapt someone else’s copyrighted work for your business (especially for promotional or revenue-generating purposes) without permission or a license, I strongly encourage you to consult an attorney for a discussion on fair use. Fair use analysis can be complicated and is fact-specific.

While this was a quite general overview of copyright issues, I hope there were some valuable takeaways for those not familiar with intellectual property concepts. In Part II of this series, I will continue the general intellectual property overview by discussing trademarks.