8.3 Copyrights

Copyrights protect original creative works, granting creators exclusive rights to control their use and distribution. This legal framework covers a wide range of expressions, from books and music to art and software, providing economic incentives for innovation and creativity.

Understanding copyrights is crucial for international consultants advising small and medium-sized enterprises. It impacts how businesses create, use, and monetize intellectual property, affecting everything from product development to marketing strategies in the global marketplace.

Copyright fundamentals

Definition of copyright

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• Exclusive legal right granted to the creator of an original work
• Protects the expression of ideas in a tangible form (writings, music, art, etc.)
• Automatically attained when a work is created and fixed in a tangible medium
• Provides the copyright owner with a bundle of exclusive rights to control the use and distribution of their work

Scope of copyright protection

• Covers a wide range of creative works including literary, musical, dramatic, and artistic works
• Protects the expression of ideas, not the ideas themselves
• Requires a minimal degree of creativity and originality
• Does not protect facts, ideas, systems, or methods of operation
• Limited duration of protection, typically the life of the author plus a certain number of years

Copyright vs other intellectual property

• Copyright protects original creative expressions (books, music, films)
• Patents protect inventions and discoveries (machines, processes, compositions)
• Trademarks protect words, phrases, symbols, or designs identifying the source of goods or services (brand names, logos)
• Trade secrets protect confidential business information that provides a competitive advantage (formulas, client lists)

Copyright ownership

Author as default owner

• The creator of a work is typically the default owner of the copyright
• Automatic ownership upon creation and fixation of the work in a tangible form
• No registration or notice required for ownership to vest in the author
• Author can transfer ownership through written agreement or assignment

Works made for hire

• Exception to the default ownership rule for works created by employees within the scope of their employment
• Employer is considered the author and owns the copyright in works made for hire
• Certain commissioned works can also be designated as works made for hire through written agreement (contributions to collective works, translations, instructional texts)

Joint authorship of works

• Works created by two or more authors with the intention of merging their contributions into a single work
• Each joint author holds an equal, undivided interest in the entire work
• Joint authors are co-owners of the copyright and can independently exploit the work, subject to accounting to other joint authors for profits
• Contributions must be independently copyrightable and not just ideas or feedback

Copyright registration process

Benefits of registration

• Establishes a public record of the copyright claim
• Prerequisite for filing an infringement lawsuit in the U.S.
• Allows for statutory damages and attorney's fees if registered prior to infringement or within 3 months of publication
• Provides prima facie evidence of validity if registered within 5 years of publication

Registration requirements

• Completed application form identifying the work, author, and claimant
• Nonrefundable filing fee paid to the U.S. Copyright Office
• Deposit copies of the work being registered (typically two complete copies for published works)
• Registration can be done online through the Electronic Copyright Office (eCO) system

Copyright notice usage

• Consists of the © symbol (or word "Copyright"), the year of first publication, and the name of the copyright owner (e.g., © 2023 John Doe)
• No longer required for works published after March 1, 1989, but still provides benefits
• Informs the public that the work is protected by copyright
• Identifies the copyright owner for potential licensees or users
• Eliminates a defense of innocent infringement in some cases

Exclusive rights of copyright holders

Right to reproduce the work

• Making copies or phonorecords of the copyrighted work
• Includes the right to make digital copies and store them electronically
• Extends to temporary copies made in the RAM of a computer

Right to create derivative works

• Preparing adaptations, translations, or other works based on the original copyrighted work
• Examples include sequels, movie adaptations, musical arrangements
• Derivative works are separately copyrightable but require permission from the original copyright owner

Right to distribute copies

• Selling, renting, leasing, or lending physical copies of the work to the public
• Includes the right of first publication and determining how the work is distributed
• Applies to digital distribution of copies through downloads or file sharing

Right to perform the work publicly

• Performing literary, musical, dramatic, or choreographic works in a public space or transmitting them to the public
• Includes live performances and digital audio transmissions of sound recordings
• Applies to public performances in person and through digital means (streaming)

Right to display the work publicly

• Showing a copy of the work directly or through a device in a public space
• Includes displaying literary, musical, dramatic, choreographic, pictorial, graphic, or sculptural works
• Applies to displaying a physical copy or transmitting a display to the public (website images)

Copyright infringement

Definition of infringement

• Violation of any of the exclusive rights granted to the copyright owner
• Includes copying, distributing, performing, or displaying the work without permission
• Does not require intent or knowledge, but innocent infringement may affect damages

Common types of infringement

• Literal copying of the entire work or substantial portions of it
• Creating unauthorized derivative works based on the original
• Distributing or selling copies of the work without permission
• Performing or displaying the work publicly without a license

Contributory vs vicarious infringement

• Contributory infringement is knowingly inducing, causing, or materially contributing to infringing conduct
• Vicarious infringement is profiting from infringing activity while having the right and ability to control it
• Both extend liability beyond the direct infringer to third parties

Consequences of infringement

• Injunctions to stop the infringing activity and prevent future infringement
• Monetary damages, including actual damages and any additional profits of the infringer
• Statutory damages of up to $150,000 per work for willful infringement
• Attorney's fees and costs may be awarded to the prevailing party

Fair use doctrine

Four factors of fair use

1. Purpose and character of the use (commercial vs. nonprofit, transformative vs. verbatim)
2. Nature of the copyrighted work (factual vs. creative, published vs. unpublished)
3. Amount and substantiality of the portion used in relation to the whole work
4. Effect of the use upon the potential market for or value of the copyrighted work

Transformative use considerations

• Uses that add new expression, meaning, or message to the original work
• Parody, criticism, commentary, and news reporting are often considered transformative
• Transformative uses are more likely to be deemed fair use

Fair use in different industries

• Education: Copying for teaching, scholarship, or research purposes
• Music: Sampling, parody, and cover versions of songs
• Film and video: Clips used for criticism, commentary, or documentary purposes
• Software: Reverse engineering for interoperability or security testing

International copyright law

Berne Convention basics

• International agreement governing copyright protection across member countries
• Establishes minimum standards for copyright protection and eliminates formalities
• Principle of national treatment: Works from member countries receive the same protection as domestic works
• Provides for automatic protection without the need for registration or notice

Country-specific copyright laws

• Each country has its own copyright laws that may provide additional or different protections
• Some countries have moral rights (attribution and integrity) in addition to economic rights
• Duration of copyright protection varies, with many countries adopting life of the author plus 50 or 70 years
• Exceptions and limitations to copyright, such as fair use or fair dealing, differ among countries

International copyright enforcement

• Enforcing copyrights across borders can be challenging due to differences in laws and procedures
• International treaties (TRIPS Agreement) provide a framework for enforcement and dispute resolution
• Copyright owners can seek remedies through local courts in the country where infringement occurs
• Online infringement can be addressed through takedown notices and cooperation with internet service providers

Licensing copyrighted works

Exclusive vs non-exclusive licenses

• Exclusive license grants the licensee the sole right to use the work, excluding even the copyright owner
• Non-exclusive license allows multiple licensees to use the work simultaneously
• Exclusive licenses must be in writing and signed by the copyright owner

Licensing agreement essentials

• Scope of rights granted (reproduction, distribution, performance, display)
• Territory and duration of the license
• Royalty payments and other compensation
• Termination provisions and consequences of breach
• Warranties and indemnification clauses

Royalties and other considerations

• Royalties are payments made to the copyright owner for the use of their work
• Can be based on a percentage of sales, a flat fee per unit, or a lump sum payment
• Other considerations include advances, minimum guarantees, and audit rights
• Royalty rates vary depending on the industry, type of work, and market conditions

Copyright duration

Length of copyright term

• For works created after January 1, 1978, copyright lasts for the life of the author plus 70 years
• For anonymous works, pseudonymous works, or works made for hire, copyright lasts 95 years from publication or 120 years from creation, whichever is shorter
• Works created before 1978 may have different terms based on prior copyright laws

Public domain works

• Works that are no longer protected by copyright and can be freely used without permission
• Includes works whose copyright term has expired, works published before 1923, and works dedicated to the public domain by their creators
• U.S. government works are also in the public domain and can be used freely

Copyright renewal process

• For works published before 1978, copyright had to be renewed after an initial 28-year term to receive the full protection
• If not renewed, works entered the public domain after the first 28 years
• Renewal is no longer required for works created after January 1, 1978, as they have a single term of protection

Digital Millennium Copyright Act (DMCA)

DMCA safe harbor provisions

• Limits liability of online service providers for copyright infringement by their users
• Requires providers to implement notice-and-takedown procedures for infringing content
• Providers must designate an agent to receive infringement notifications
• Exempts providers from liability for automatic processes, caching, and linking

DMCA takedown notices

• Formal requests sent by copyright owners to service providers to remove infringing content
• Must include identification of the copyrighted work, infringing material, and the complaining party
• Providers must promptly remove the content and notify the alleged infringer
• Counter-notices can be filed by users to contest the removal and have content restored

Anti-circumvention rules

• Prohibits circumventing technological measures that control access to copyrighted works
• Bans manufacturing or trafficking in devices or services primarily designed for circumvention
• Provides exemptions for certain uses (security testing, accessibility, archiving)
• Criminal penalties for willful circumvention for commercial gain

Copyrights in the digital age

Copyright challenges online

• Ease of copying and distributing digital content without permission
• Difficulty in identifying and locating infringers across borders
• Balancing copyright protection with fair use and free speech online
• Adapting copyright laws to new technologies and platforms

Streaming and other technologies

• Streaming platforms (Netflix, Spotify) have changed how content is consumed and licensed
• Legal issues around unauthorized streaming and stream-ripping
• Blockchain technology and its potential impact on copyright management and royalty distribution
• Artificial intelligence and machine learning in creating and analyzing copyrighted works

Future of copyright law

• Need for international harmonization and cooperation in enforcing copyrights
• Balancing interests of creators, users, and intermediaries in the digital environment
• Addressing orphan works and out-of-print works through licensing and digitization efforts
• Adapting copyright exceptions and limitations to facilitate innovation and creativity