Overview of Copyrights

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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 don't even realize that they are creating or using copyrighted works on a regular basis. Copyright is a form of intellectual property protection which subsists in original works of authorship. Works that are protected by copyright include the following broad categories: (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 (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.[Note 1] Anyone who violates any of the exclusive rights of a copyright owner is an infringer of the copyright. Copyright protection begins as soon as an original work of authorship is "fixed" in any tangible medium of expression. In essence, as soon as pen is put 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 Copyright protection exists for both published and unpublished works, for both two- and three- dimensional works, and for derivative works based upon an original copyrighted work. Copyright is a lengthy form of protection. Most works are protected for the life of the author plus fifty years, or, in the case of works made for hire, seventy-five years from the date of first publication, or one hundred years from the year of its creation, whichever expires first.

Exception for "Fair Use"

The doctrine of fair use tries to balance the rights of copyright owners with society's interest in allowing copying in certain, limited circumstances.  This doctrine has at its core a fundamental belief that not all copying should be banned, particularly in socially important endeavors such as criticism, news reporting, teaching, and research.

Although the doctrine of fair use was originally created by the judiciary, it is now set forth in the Copyright Act. Under the Act, four factors are to be considered in order to determine whether a specific action is to be considered a "fair use." These factors are as follows:


• the purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes;


• the nature of the copyrighted work;


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


• the effect of the use upon the potential market for or value of the copyrighted work.

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, i.e., not been 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 work must be fixed 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. Some past materials may not be protected for technical or legal reasons, however, businesses can certainly make advance plans for copyright protection with every new project.

Work For Hire Issues.

One reason copyright protection should be considered in advance of any new project is that every copyrighted work has an "author." The author is the person who creates the 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 course of his or her employment. Absent a written agreement to the contrary, anything produced by an employee is presumed to belong to the employer as a work made for hire. Nonemployees are treated differently for copyright purposes. If a business wants to claim copyright ownership of a work created by a nonemployee or group of nonemployees, it should have an advance written agreement with the nonemployee or group of nonemployees. There are a few limited circumstances where an advance written agreement may not be required (e.g., where the work is specially ordered or commissioned for use as a contribution to a collective work), but the language of the Copyright Act is vague enough that 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. You also need a separate "work for hire" agreement for each new project. Open-ended agreements are not effective. And, if there is no effective written agreement, the odds are great that the nonemployee will be deemed the "author" and will own all rights in the work. A copyright assignment can always be executed after the work is created, however, it is more difficult to convince independent contractors to relinquish their rights after the project is finished. 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. This same language can be incorporated into a formal agreement. Again, this agreement should be executed before work begins on any project. Even if the same consultant works on multiple projects, a separate work for hire agreement should be executed for each work.

Copyright Notice.

In addition to securing work for hire agreements with third parties, we recommend that a copyright notice be included 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 placed 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 the copyright notice requirement was eliminated as a condition for copyright protection. Again, a copyright notice is not required, except for works distributed prior to March 1, 1989. However, businesses should include copyright notices, since the notice is a reasonably strong deterrent against infringement. Moreover, if a copyright notice is included and the work is copied, a defense based on innocent infringement is not available. 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." and (2) the year of first publication; and (3) the name of the copyright owner. 17 U.S.C. › 401. The phrase "all rights reserved" can also be added, but is not required. A typical copyright notice would take the following form: © 1994 Arter & Hadden. All rights reserved.

Copyright Registration.

Copyright registration is a prerequisite for any action for infringement involving works of U.S. origin. A standard copyright registration can be obtained within two to three months by filing a simple two-page form, attaching a photograph or copy of the work and submitting a $20 fee. Expedited registration is also possible, especially when there is impending litigation. 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 prior to the date of the infringement or within three months of first publication of the work[Note 2], the copyright holder can secure injunctive relief, and may elect to recover either statutory or actual damages and profits of the infringer. 17 U.S.C. sections 502 and 504. If the work is not registered prior to the date of the infringement (or within three months of first publication), the copyright owner is not entitled to statutory damages or attorneys' fees. Of course, the court can order actual damages and injunctive relief. 17 U.S.C section 412.

Establishing a Prima Facie Claim of Infringement.

To establish a prima facie claim of copyright infringement, two basic elements must be proved: (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. section 501(a).

a. Ownership.

The first factor, ownership, is most often shown through certificates of copyright registration for each of the copyright works involved. The Copyright Act specifies that in any judicial proceeding, a certificate of copyright registration made before or within five (5) years constitutes prima facie evidence of the validity of the copyright and of the facts stated in the certificate. 17 U.S.C. section 410(c). Where a registration certificate is produced, the burden shifts to the defendant to 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. Copying or violation of the exclusive rights of a copyright owner is proved by showing first that the defendant had access to the copyrighted work, and second, 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. section 101 (1978).


1. Access.

Direct evidence of access to the copyrighted work is often not available. Access is more than evidence of adherence to the general ideas expressed, since ideas standing alone cannot be copyrighted. Similarity in expression also is not infringing to the extent the nature of the creation makes the similarity necessary. Accordingly, indispensable expression of generalized ideas may only be protected against virtually identical copying. If the copies are close but not substantially similar in terms of protected expression, there can be no infringement, since it is not a violation to possess something which 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 exact copies of the whole of a copyrighted work. Unauthorized literal reproduction of the whole, or substantially the whole, of a copyrighted work constitutes an infringement. Even when only a section or part of the original work has been copied, substantial similarity can be shown, since literal copying of even one section will, in most cases, defy coincidence. Common errors can also be used to prove copying by reducing 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, paraphrasing, done to a great extent, is copying and an infringement. A copy made from an infringing copy is also an infringement of the original. It makes no difference that the pirate did not know that the version from which he was copying was infringing; he at least knew that what he was copying was not his. Even the fact that an infringer acknowledges the source from which the appropriated matter was derived does 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 must also be considered. 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 possessing 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 may not be rented or leased without the authorization of the copyright owner.[Note 3] 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. When a defendant presents evidence that the copies in question were legally made and that he or she owned them, the burden shifts to the copyright owner to demonstrate that the copies were either not legally made or not owned by the defendant.

Remedies for Infringement.

Copyright law provides both civil and criminal remedies against infringers. Most infringement actions are pursued 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). Actual damages are sought in some cases, and when this occurs, the infringer's profits are added to the award. In establishing the infringer's profits, the copyright holder is required to present proof only of the infringer's gross revenue, and 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. section 504(b). In a civil infringement action, a prevailing copyright holder is also entitled to costs and attorneys' fees. 17 U.S.C. section 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. section 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 (e.g., 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. section 503(b). Additional remedies may be available when infringing copies are created overseas and imported into the United States. Section 602 of the Copyright Act provides that the importation of unauthorized copies of a work is prohibited. 17 U.S.C. section 602. Any unauthorized "articles" which are imported are subject to seizure and forfeiture by the Customs Service. 17 U.S.C. section 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. section 506(a). Criminal copyright infringement, meaning the piracy[Note 4] and counterfeiting[Note 5] of all forms of copyrighted works, is prosecuted and punished in accordance with title 18 of the United States Code, covering crimes and criminal procedure. 18 U.S.C. section 1 et seq. (1948). It is a felony offense to to reproduce or distribute, within a 180-day period, more than ten unauthorized copies or phonorecords of one or more copyrighted works, with a collective value of more than $2,500. A five year prison term and a fine of up to $250,000 can be imposed. 18 U.S.C. section 2319(b). Where the offense is a second or subsequent offense, the term of imprisonment increases to ten years. 18 U.S.C. section 2319(b)(2).