Enforcing Trade Secret Protection

Enforcing Trade Secret Protection 

So last time I talked about what makes something a trade secret.  The next question is what do you do to enforce trade secret protection.   When someone improperly acquires, uses, or discloses a trade secret, the owner of the trade secret can sue the one who acted improperly. 

Probably the most common trade secret cases involve situations in which a trusted person discloses or uses a trade secret in a breach of confidence.  The trusted person in these cases had a duty of confidentiality to the owner of the trade secret.  This duty of confidentiality requires the person to refrain from disclosing or using the trade secret without permission.  There are several scenarios which result in a duty of confidentiality, as follows:

1- Special relationships:  these are folks who are in an employer-employee relationship, partners, joint venturers, or other types of agents.  This could also include special fiduciary relationships, such as the attorney-client relationship. 

2- Confidentiality contracts:  these are folks who expressly agree to maintain a trade secret in confidence.  These can include things confidentiality agreements, but can also include shrink-wrap licenses and lick-wrap licenses for software. 

3- Implied confidentiality contract: these folks are on notice that they are about to learn a trade secret in confidence, they agree to hear the secret, and are then deemed to have implicitly agreed to retain the information in confidence.

Next time, I'll talk about the disclosure of trade secrets by third parties.  Let me know if you have any questions.

Trade Secrets, or Why We Still Don't Know The Secret Recipe

Today I want to start talking a bit about a different kind of intellectual property.  In many businesses, valuable ideas and information is developed, such as a special manufacturing process, a computer program, or a method of doing business.  These ideas and information can give the business a competitive advantage in producing or selling their goods and services.  Of course, this competitive advantage only exists so long as the competitors don't have access to the ideas and information.  This is the basis of what are known as "trade secrets."  Businesses may prohibit their employees and associates from divulging its trade secrets, and the law prohibits competitors from using improper means to gain access to its trade secrets.  

What is a trade secret?  First, what is not a trade secret?  Business owners can protect their know-how by several methods.  But most protections exist in exchange for the business giving access to the know-how to the public.  For example, patent protection requires that the inventor tell the world how to make and use his invention in exchange for giving the inventor the right to keep others from using it without his permission for a period of time.  After that period of time expires, the world is free to use the invention.  Trade secrets are secrets, so they are not the same as patents.  

Generally, trade secrets are defined as "any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.". Coca-Cola's formula is a trade secret.  

Generally courts consider several factors to determine if information or an idea deserves trade secret status and protection.  These factors include:

(1) How widely is the idea or information known outside the business?  The information must be "substantially secret."

(2) Who within the business knows the idea or information? The business must exercise reasonable precautions, such as limiting exposure to those who need it and assuring that all who have exposure to the information or idea are aware that it is to be kept confidential. 

(3) What measures has the business taken to ensure that the idea or information remains secret?   The business must take reasonable precautions to prevent disclosure to others.

(4) How valuable is the information to the business and it's competitors?  There must be commercial value to the information or idea. 

(5) How much effort or money has the business expended in developing or acquiring the idea or information?  The greater the expenditure, the more likely the information or idea will be considered a trade secret.

(6) How difficult would it be for others to properly acquire or duplicate the idea or information?  If simple library research or data gathering can duplicate it, it is unlikely to be protected. 

Next time, I'll talk about the protection of trade secrets under the law.

If you have any questions about trade secrets, or any other aspect of intellectual property law, please don't hesitate to contact me at JDellinger@mainspringlaw.com.  

Copyright Infringement: Downloading, Part 2

Back in March, I talked a little about downloading copyright cases.  We can help you if you receive correspondence from someone accusing you of copyright infringement via downloading of material. 

Here is the big picture on how we can help out.   First, I should make clear my thoughts on how best to handle these cases is evolving.  For some clients, the best option will certainly be to try to settle the case by paying a negotiated amount to the copyright holder.  We can usually save clients some money by helping with the negotiations, and are glad to help.  

Settling works, but we are increasingly interested in handling these matters in other ways.  The way the legal system is supposed to work for copyright infringement is as follows:

1:   A infringes B's copyright.  

2:  B sues A in a proper lawsuit in a proper jurisdiction. 

3:  B then has the burden of proving that A infringed his copyright.  

These downloading copyright cases are different.  In my opinion, these cases are a sort of an extortion where the copyright owners file cheap cases in which big groups of defendants are improperly joined together in a single lawsuit in the wrong jurisdiction.  Then the accusers pretend that an IP address  is the same thing as a person, and that proof of downloading at an IP address is proof that the owner of the IP address is the infringer.  Add in the common fact that any times the copyright owners are known to be the ones who plant their works on bit torrent sites as bait.   And never mind that the copyright owners don't really want to prove anything, as they instead offer a settlement fee that is low enough to discourage fighting.

So the whole thing is somewhat offensive to my understanding of how these things should be.  So I generally recommend a strategy other than settling. Here's what I like to do.  After being retained,   I will figure out the current state of your case, and get some information from you on your situation with regard to the infringement - stuff like is your ip router open to others, are you the only user, etc.  Then I'll figure out how to best respond in a way that might make you an unattractive defendant for what i have come to believe is a misuse of the system.  The whole thing is based on what is best for you, with a goal of not paying the settlement unless it is warranted. 

As always, drop me a note at JDellinger@mainspringlaw.com if you have any questions.

Copyright Infringement: Downloading, Part 1

Over the past year, we've talked alot about the basics of United States copyright law.  For lots of folks, this might've been a handy way to be introduced to the subject.  But there is another mechanism by which more Americans are being introduced to the copyright system, often rudely.

It starts with a letter, usually from the recipient's internet service provider.  In that letter, the recipient learns that he is apparently being sued, or might be sued, or something like that, for copyright infringement due to downloading copyright-protected subject matter from the Internet.  In what can only be described as an avalanche of lawsuits, hundreds of thousands of Americans have been sued for allegedly sharing copyright-protected material, usually based on use of the BitTorrent system.  

It seems clear that a certain segment of copyright owners has embraced filing lawsuits and demanding settlements as a new revenue stream.  Some of the protected subject matter is conventional subject matter, such as the award-winning movie "The Hurt Locker."  a lot of it is, frankly, pornography.  Whatever the subject matter, many lawsuits have been filed.  

Here is the typical pattern:  first, the copyright holders file a suit, naming the defendants by using their Internet Protocol address.  An Internet Protocol address (IP address) is a numerical label assigned to each device (e.g., computer, printer) participating in a computer network that uses the Internet Protocol for communication.  It is a unique number, and the copyright holders presumably determine that there subject matter has been downloaded to the IP addresses named in the complaints filed.  After the lawsuit is filed, the court issues a subpoena, ordering the Internet Service Providers to provide them with the personal details of the owner of the IP address.  Then, the copyright holder starts his efforts to extract a settlement from the owner of the IP address.

I'm going to talk more about this sort of action over the next few days.  Before going on, I want to clarify a few things.  Downloading copyright protected material without permission is almost certainly copyright infringement.  You should not do this.  But you also shouldn't be subject to extortive settlement efforts, and you have to remember that, in order to be found liable for copyright infringement, the copyright holder must prove certain facts, including that a specific person violated the copyright.  

Despite the massive number of defendants, none of the cases have made it into a full jury trial as the copyright holders ask for in their original complaint. This calls into question the evidentiary value of the information held by the copyright holders when they file their complaint.  It seems clear that the goal is not to go to court, but to reach a settlement.  

Next time, I'm going to attempt to talk about some of the technical stuff, and we'll work toward figuring out how you might deal with this kind of situation if you have to. 

As always, drop me a note at JDellinger@mainspringlaw.com if you have any questions.



  

Why Trademark Blue Ivy?

From Slate.com:

Why Trademark Blue Ivy?
By Emily Bazelon

http://www.slate.com/blogs/xx_factor/2012/02/15/beyonce_and_jay_z_want_to_trademark_blue_ivy_why_.html?wpisrc=sl_ipad

Common Copyright Problems: You Must Register Your Copyright!!

Today, i thought a bit about my resolutions for the New Year.  So I went to church, I went to the gym, I watched some football.  But one of my resolutions just started nagging at me just now-- it was the one about doing a better job posting on my blog.  And so, while I'm watching the Giants play the Niners, I want to work toward finishing up copyright law by briefly discussing a few of the more common problems experienced by ordinary folks. 

For you artists and authors out there, you must register your works with the U.S. Copyright Office!!! Many many times I am contacted by folks who believe that their artistic works have been copied.  There are things you can do in such situations, but, as I wrote in an earlier blog post,  it is essentially impossible to rely upon the courts to protect your copyright in the absence of registration with the Copyright Office.  U.S. copyright owners must register their copyrights before they can bring a lawsuit for copyright infringement.  And if a work is not registered before the alleged infringement, or within a short period of time following publication of the work, the owner of the copyright cannot receive what are known as "statutory damages" and won't be eligible to receive attorney fees.  

You see, if you sue someone for copyright infringement, you can collect damages based on your lost profits or the infringers unlawful monetary gain.   One big problem with copyright protection is that many instances of copyright infringement do not have any significant economic value.  For example, if I photocopy a book instead of buying a copy, the actual damages might be the cost of the book, clearly not enough to file a lawsuit.  So owners of copyrights might be discouraged from pursuing lawsuits against infringers, because lawsuits are expensive.  The US Congress fixed this by including the possibility of copyright owners receiving their legal fees and a set statutory amount of up to $150,000 for willful infringement.  The only criteria for being eligible for this possible award ( instead of the lower actual economic damages) is that the work must be registered with the United States Copyright Office before the infringement occurs.  Needless to say, the possibility of a larger damages award may make a big difference in determining whether a person can afford to file a lawsuit, and can result in the copyright owner having more leverage in any settlement negotiations. 

Lots of folks seem to think their work is protected if it s registered with one of the performing rights organizations, like ASCAP, or if it s registered with a commercial site like myfreecopyright.com.  You need to know that this is not the case.  While these other types of registration may have their place, they are not a substitute for registration with the Copyright Office.  So it's very important that your work is registered with the US Copyright Office.  

Another common problem experienced by the public at large is the possibility of being sued for the unauthorized downloading of video or audio content from the Internet.  We'll talk a bit about this situation next time.  If you have any questions about copyright law, email us or post them on the blog.  The email is JDellinger@mainspringlaw.com.  

International Copyright Protection

We've talked over the last several months about the basic aspects of United States copyright law.  I'd like to finish by talking a little about international copyright law.

The Berne Convention is the common name for the International Union for the Protection of Literary and Artistic Works.  Most developed countries are members of the Berne Convention, including the U.S. since 1989.  Run by the Word International Property Organization, the Berne Convention attempts to unify the treatment of copyright in each country.  Convention members must provide as strong protection to works originating in other member  countries as they do to works from within the country.  

The Berne Convention protects literary and artistic works.  Protection is automatic with no required formalities, and lasts generally for a term of the life of the author plus fifty years.  If a work of art originates in a member country, it is entitled to protection in all other member countries. 

The Universal Copyright Convention is administered by the United Nations.  It provides for less protection than the Berne Convention, but covers some different countries.  It protects literary, scientific, and artistic works.  There are some requirements, such as requiring that works be marked as copyright works.  

The World Intellectual Property Organization (WIPO) Copyright Treaty was ratified by the United States in 1998.  It has become very important in applying copyright law to the Internet.  This includes some important regulations and procedures regarding circumvention of technology used to protect intellectual property. 

 If you have any questions about copyright law, email us or post them on the blog.  The email is JDellinger@mainspringlaw.com .  We also have a free pamphlet discussing copyright law and how it effects small businesses and individuals.

Statutory Damages for Copyright Infringement

Last time, we talked about remedies for copyright infringement. A copyright owner can get an injunction, ordering the infringer to stop the infringing activity. He can have infringing copies impounded and destroyed. And he can get the actual damages he suffered due to the infringement of his copyright or violation of his moral rights.

One problem is that some copyright infringements don't actually result in a great deal in actual damages or profits.  To solve this problem, the Copyright Act has provisions that provide for a different remedy, called statutory damages. Copyright owners may elect to receive this type of damages instead of actual damages in certain situations. If elected, the copyright owner can receive an amount that the court considers fair, ranging from $750 up to $30,000 for each infringed work. The court will decide what amount within that range is fair, and will generally consider how much actual damage the copyright owner suffered, and how much the damages should be to deter others from infringing the same kind of copyright protected work. If the copyright owner can prove that the infringer did so willfully, the statutory damages can be increased up to $150,000 per infringed work. Similarly, if the infringer can prove that he was not aware and had no reason to believe his acts constituted infringement, the court can decrease the statutory damages to no less than $200 per infringed work.

One key point is that copyright owners must register there works with the Copyright Office within certain deadlines in order to have the award of statutory damages. The work must have been registered before the commencement of the infringement and must have an effective date of registration not later than the earlier of 3 months after the first publication of the work or 1 month after the copyright owner has learned of the infringement. The Copyright Act requires that there will be no award of statutory damages for (1) any infringement of copyright in an unpublished work commenced before the effective date of its registration; or (2) any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work.

Probably the most important take home message is that copyright owners must register their works within certain prescribed periods in order to have statutory damages available in the case of infringement. And without ths possible remedy, enforcing your copyright may not be economically feasible.

Next time, we'll talk a bit about international copyright protection. If you have any questions about copyright law, email us or post them on the blog.  The email is JDellinger@mainspringlaw.com .  We also have a free pamphlet discussing copyright law and how it effects small businesses and individuals.

Remedies for Copyright Infringement

So, if you have a copyright protected work, and another person copies it without your permission, you must file a lawsuit against the person who copied your work.  If you can prove that the person infringed your rights, what can the court do for you?

The first class of remedies a court is authorized to grant are known as injunctions.  The Copyright Act authorizes courts to grant both preliminary and permanent injunctions, ordering the infringing party to stop the copyright infringement and any violations of the author's rights of attribution and integrity in works of visual art.  In addition, the Copyright Act has provisions for impounding infringing copies and materials used to infringe.  Upon final judgment of infringement, these impounded things can be destroyed. 

The second class of remedies a court can grant are damages and profits.  The successful plaintiff in a copyright case is entitled to recover the actual damages he suffered due to the infringement of his copyright or violation of his moral rights.  Additionally, he is entitled to collect any of the infringer's profits that are attributable to the infringement that are not already accounted for in the plaintiff's damages.  Generally, the actual damages will be the sales lost by the plaintiff to the infringer due to the infringer if the infringer is a competitor of the plaintiff.  Alternatively, if the infringer is not a competitor, the damages may take the form of a royalty payment for the infringing activity. 

One important aspect of proving damages in a copyright case is that the copyright owner only has to prove the gross revenue of the infringer.  The defendant then has the burden of proving how much should be deducted from the gross revenue for his expenses and how much of the gross revenue is due to factors other than his infringement.

As you can imagine, some copyright infringements might not generate a great deal in actual damages or profits.  The Copyright Act has provisions that provide for a different remedy, called Statutory Damages, in such instances. We'll talk about these provisions next time.  In the meantime, if you have any questions about copyright law, email us or post them on the blog.  The email is JDellinger@mainspringlaw.com .  We also have a free pamphlet discussing copyright law and how it effects small businesses and individuals.

How Long Does a Copyright Last?

Lots of folks know a little about copyright law, and one of the things people are always interested in is figuring out when a copyright is no longer valid.  First, lets talk about when copyright protection starts.  Under the common law, copyright protection began immediately upon the fixation of the work in a tangible medium.  Protection under the U. S. Copyright Act depends on when the work was published.  Between 1909 and 1977, federal protection commenced upon publication with proper copyright notice.  Since January 1, 1978, federal copyright protection commences at the time of fixation, same as the common law rule. 

Figuring out when a copyright expires is a little tricky.  Under the 1909 Copyright Act, the term was 28 years, which could be renewed for a second 28 year term.  In the revision of the Copyright Act that became effective on January 1, 1978, Congress decided to extend the terms of those works that were still under copyright protection.  It simply added 19 years to the second term, making the second term 47 years.  This period was extended again in 1998 by adding an additional 20 years to the second term.   

For works created on or after January 1, 1978, copyright endures vor the life of the author plus 70 years.  In the case of joint authors, the copyright duration is tied to the life of the longest living author, to which the 70 years is added.  If a work has an anonymous or pseudonymous author, the copyright endures for the shorter of 95 years after first publication or 120 years after creation of the work.  For works made for hire, the same term applies-- the shorter of 95 years after first publication or 120 years after creation of the work. 

If a work was created before January 1, 1978, but not yet published, the same terms apply, with the added option of protection until at least December 31, 2002, if that was longer than the other calculated term.  In an effort to encourage publication, those unpublished works that were published by December 31, 2002 are now protected under an extension of term through December 31, 2047. 

Next time, we'll refocus on infringement, and discuss the remedies for copyright infringement.  If you have any questions about copyright law, email us or post them on the blog.  The email is JDellinger@mainspringlaw.com .  We also have a free pamphlet discussing copyright law as it effects small businesses and individuals

Copyright Registration: How? Why?

So copyright protection arises upon fixation of a creative work in a tangible medium.  So why should you bother with registration with the Copyright Office?  And how do you do it?

First, why get a work registered with the Copyright Office?  There are actually several very good reasons.  It is essentially impossible to rely upon the courts to protect your copyright in the absence of registration with the Copyright Office.  U.S. copyright owners must register their copyrights before they can bring a lawsuit for copyright infringement.  Note, however, that this requirement can be met by registering the copyright after the infringement.  But this sort of late registration is discouraged because certain remedies under the law are reserved for those who have their works registered early.  If a work is not registered before the alleged infringement, or within a short period of time following publication of the work, the owner of the copyright cannot receive what are known as "statutory damages".  Further, late registrants are not eligible to receive attorney fees.  I'll discuss these remedies later.  For now, suffice it to say that statutory damages and attorney fees can be very important in copyright litigation.

So you need to register your work to file a lawsuit and get statutory damages and attorney fees.  What do you have to do?  The owner of a copyright may register his work with the Copyright Office at any time.  Such registration includes completing an application and filing it with the Copyright Office along with copies of the work.  There is no rigorous examination of copyright applications, but those applications that are not in compliance with the requirements are rejected.  If the work is published, Copyright regulations require submission of copies of the work within three months of publication to the Library of Congress as well.

Next time, we'll talk about the duration of copyright protection. If you have any questions about copyright law, email us or post them on the blog.  The email is JDellinger@mainspringlaw.com.  We also have a free pamphlet discussing copyright law as it effects small businesses and individuals.

Copyright Notice

Lots of folks think that the way to ensure that their creative work is protected by copyright is to include some notice that it is copyright protected, or including the © in the work.  But requirement of such a notice seems inconsistent with the idea that creative works are copyright-protected when they are fixed.  That said, in the United States, copyright notice has, at various times, been very important in protecting one's rights.  Different versions of the copyright law had different requirements.  It is important to know these differences when looking at older works, as the law at the time of publication applies with regard to notice requirements. 

Copyright Act of 1909:  Under this older scheme, applicable through January 1, 1978, common law copyright protection applied before a work was published.  Upon publication, there was no common law protection, and protection depended upon compliance with the statutory requirements.  The statute required that all authorized copies of a work carried proper notice of copyright.  This requirement was fairly strictly construed.  If even a few copies of a work had improper notice or no notice, then all copyright protection in the work could be lost. 

Copyright Act of 1976:  This scheme applies to works published between January 1, 1978 and March 1, 1989.  In this scheme, federal statutory protection began upon fixation of the work in a tangible form.  Notice was required for all visually perceptible copies of a work that were publicly distributed.  As before, failure to do so could result in loss of copyright protection.  However, if certain conditions were satisfied, the copyright protection could be saved in spite of the improper notice.  Copyright protection could be saved if only a small number of copies were distributed without notice, if the work was registered with the Copyright Office within five years of publication and efforts were made to add notice to copies distributed after the omission of notice was discovered, and if the copies of the work were distributed in direct violation of an express agreement in which the copyright owner insisted that the copies include notice.  If a copies lacked notice, and even if copyright protection was saved, innocent infringers who relied upon the lack of notice as an indication that the work was in the public domain were excused from paying damages for their infringement. 

Berne Convention:  This is the current scheme, applicable since March 1, 1989.  The Berne Convention is an international copyright protection scheme.  Most foreign countries have long shunned the need for copyright notice and other formalities.  In order to join the Berne Convention, the U.S. had to eliminate its notice requirement.  Accordingly, notice requirement is now strictly voluntary.  However, the U.S. code attempts to encourage the inclusion of the voluntary notice by providing that if proper notice is included on the published copy of a work to which an accused infringer had access, the defendant could not use an innocent infringer defense to mitigate actual or statutory damages.  Thus, including notice can be very important in any copyright litigation.

Next time, we'll talk about the requirements for copyright registration, and why it is worthwhile. If you have any questions about copyright law, email us or post them on the blog.  The email is JDellinger@mainspringlaw.com.  We also have a free pamphlet discussing copyright law as it effects small businesses and individuals.

Divisibility of Ownership of Copyright

As you know, copyright law in the U.S. protects a bundle of exclusive economic rights.  These include the right to reproduce the work, the right to prepare derivative works, the right to distribute copies of the work to the public, the right to perform the work publicly, and the right to display the work.  Each of these economic rights are generally owned by the author of the work.  But the U.S. Copyright Act provides that the different rights can be assigned to others.  In fact, the author can even subdivide the rights to others.  As an example, the author of a book owns the right to make derivative works.  He could assign a part of this right, such as the right to adapt the book into a movie, to one person, and he could assign another part of that right, such as the right to publish a foreign language translation of of the book to another person.

So how does a copyright owner transfer his rights?  All transfers of exclusive copyright ownership must be in writing.  Note, however, if the transfer is merely permission to do something protected by copyright law, but not an exclusive right, it is just a license, and may be oral.

So does a work of art have to have a notice of copyright in order to be protected by United States copyright law? We'll talk about that next time.  If you have any questions about copyright law, email us or post them on the blog.  The email is JDellinger@mainspringlaw.com.  We also have a free pamphlet discussing copyright law as it effects small businesses and individuals.

Copyright in Collective Works

So, say you and your four best friends are all poets.  You each write a few poems.  Among your poems is a limerick in which you extoll the virtues of drinking beer.  It's a really nice limerick.  All of the poems are really nice.  Your friend, Cole Lecter, gathers all the poems together and publishes them in a collection.  So, who owns the copywrite?

Well, fortunately, the drafters of the U.S. Copyright Act thought about this situation.  Section 201(c) of the Copyright Act provides that

Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.

With this provision, it is clear that the presumption is that each of the contributors retain the copyright in his own works of authorship.  Thus, your limerick belongs to you.  What Cole has in this case (unless the parties agree otherwise) is the privilege to reproduce and distribute the individual works as part of his collection.  Cole does own the copyright to any work of his own authorship that is included in the collection.  For example, Cole's expression or contribution might include the selection and arrangement of the separate works, or the preface that he wrote himself. 

Is it possible for copyright rights in a single work to be owned by different folks?  Next time, we'll talk about that.  In the meantime, if you have any questions about copyright law, email us or post them on the blog.  The email is JDellinger@mainspringlaw.com.  We also have a free pamphlet discussing copyright law as it effects small businesses and individuals.

The Boss Might Own the Copyright: Works For Hire

In my last post, i talked about how the usual situation is that the initial owner of the copyright of a work is the author of the work.  A very important exception to this "usual situation" is when a work is "made for hire" according to the Copyright Act. According to the Copyright Act, section 101:

A “work made for hire” is — 

(1) a work prepared by an employee within the scope of his or her employment; or

(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.

It is important to determine if an artist who is making a work for another person is working more like an employee of "the boss", or if he is acting as an independent contractor on a specially ordered or commissioned work. If he is an employee, the initial copyright owner is the employer. If e is not an employee, then the initial owner of the copyright is the artist unless the parties agreed otherwise in writing. Generally, determining whether an artist is an employee ( and the work a work for hire) or an independent contractor is based upon a consideration of several criteria, including the following:

(1) the level of skill required- greater required skill weighs against a work for hire.
(2) the source of tools and instruments used- if provided by the artist, less likely to be found a work for hire.
(3) the location of the work- if done on artist's premises, less likely to be a work for hire.
(4) the duration of the relationship between the boss and the artist- shorter duration is less likely to be a work for hire.
(5) the degree to which the boss has the right to assign the artist to other tasks- if the boss can do this, more likely to be a work for hire.
(6) the artist's discretion in setting his hours- if the artist can do this, more likely not a work for hire.
(7) the method of payment- if the same as other employees, more likely a work for hire.
(8) the artist's role in hiring and paying any needed assistants- if he hires and pays assistants, less likely to be a work for hire.
(9) whether the work is part of the regular business of the boss- if it is, more likely to be a work for hire.
(10) whether the boss is, in fact, in business- if not, more likely not a work for hire.
(11) whether the boss provides employee benefits for the artist- if he does, more likely a work for hire.
(12) whether the boss withholds taxes from the artist's pay- if he does, more likely a work for hire.

The creator of a work for hire has very few rights under copyright law. Thus, it is very important to understand who owns a commissioned work and generally best to get it in writing from the start.

So who owns the copyright in a collection of stories or photographs with many different artists? I'll talk about that next time. In the meantime, if you have any questions about copyright law, email us or post them on the blog.  The email is JDellinger@mainspringlaw.com.  We also have a free pamphlet discussing copyright law as it effects small businesses and individuals.

From Politico: movie, music pact with Internet Service Providers

http://www.politico.com/news/stories/0711/58499.html

Who Owns a Copyright?

I hope you all had a nice 4th of July holiday.  Over the next few days, I'm going to write about ownership of copyright.  There are several different situations that need to be considered. 

Generally, the initial owner of the copyright of a work is the author of the work.  The author can exploit the work himself, he can transfer part of his rights to another, or he can transfer all of his rights to another.  But who is the author?  Generally, the author is the person who conceives of the copyrightable expression and fixes it into a tangible form, or has someone else to fix into a tangible form.  One interesting situation is when a work is made for hire.  In that case, the one who hired the worker who actually made the work is considered the author.  I'll talk about works for hire in my next blog. 

Another interesting ownership question involves ownership in joint works.  A work prepared by two or more authors who intend that their work be merged into inseparable or interdependent parts of a single work is considered a joint work.  The emphasis is on the intent of the authors at the time each of them made his contribution to the work.  The different authors don't need to work at the same time, or even know each other, but must intend to contribute to a single unitary work at the time he makes his contribution. 

Joint authors generally each own equal undivided interests in the joint work.  For example, two joint authors would each own one-half interest in the entire work.  Each owner is entitled to exploit the copyright without seeking any permission from the other, but will have to share the profits.  Note that this situation differs from one where two authors each own different copyrights that are exploited together.  For example, if A owns the rights to the lyrics of a song, and B owns the rights to the music, and either exploits the combination without the other's permission, he will be liable for infringement of the other's copyright.

Note that the ownership by joint authors of equal shares can be varied by agreement of the parties.  If you have any questions about the copyright ownership, email us or post them on the blog.  The email is JDellinger@mainspringlaw.com.  We also have a free pamphlet discussing copyright law as it effects small businesses and individuals.

Enough?

It's the end of the month, so I thought I'd take a break from copyright law and retell a story a friend recently shared with me about an American banker, a Mexican fisherman, and the American Dream.

An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked.  Inside the small boat were several large yellowfin tuna.  The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, "only a little while."

The American then asked why didn't he stay out longer and catch more fish?

The Mexican said he had enough to support his family's immediate needs.

The American then asked, "but what do you do with the rest of your time?"

The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siestas with my wife, Maria, stroll into the village each evening where I sip wine, and play guitar with my amigos.  I have a full and busy life."

The American scoffed, "I am a Harvard MBA and could help you.  You should spend more time fishing and with the proceeds, buy a bigger boat.  With the proceeds from the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats.  Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery.  You would control the product, processing, and distribution.  You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually New York City, where you will run your expanding enterprise."

The Mexican fisherman asked, "But, how long will this all take?"

To which the American replied, "15 - 20 years."

"But what then?" Asked the Mexican.

The American laughed and said, "That's the best part.  When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions!"

"Millions - then what?"

The American said, "Then you would retire.  Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."

I hope all of you have the chance to spend some part of the upcoming holiday weekend with your friends and family, and I hope you'll reflect on what it means to have enough. 

When Copyright Violations are Fair: The Fair Use Defense to Infringement

In certain instances, a copyright owner might be able to show that an accused infringer did, in fact, infringe at least one of his rights under copyright law, but the infringer might be excused.  In what is known as the Fair Use Defense, courts are able to avoid rigid application of copyright law when they consider the law unfair or when the law stifles creativity or the dissemination of useful information to the public.  The Fair Use Defense is codified in Section 107 of the Copyright Act, as follows:

Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include — 

(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.

The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

As you can see, the Fair Use Doctrine as codified is meant to be applied flexibly, on a case-by-case basis, with many factors considered.  Several different factors are listed, but the court can consider other factors as well.  Going through each of the listed factors:

(1)the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes: use for a commercial purpose is less likely to be deemed fair use than use for nonprofit educational purposes.  Moreover, if the accused acted in good faith, it is more likely to be found a fair use.  Incidental use, as opposed to extensive copying, is more likely to be deemed fair use.

(2)the nature of the copyrighted work: whether a work is published or not can be important-- copying an unpublished work is less likely to be deemed fair use.

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole: if an unimportant portion of a work is copied, or if a small amount of a work is copied, it is more likely to be deemed a fair use. 

(4) the effect of the use upon the potential market for or value of the copyrighted work: If the copying has the potential to impair the marketing efforts of the owner of the copyrighted work, it is less likely to be deemed fair use. 

The Supreme Court has made it clear that no single factor is conclusive in determining fair use.  The fair use defense.  If you have any questions about the fair use defense to copyright infringement, email us or post them on the blog.  The email is JDellinger@mainspringlaw.com.  We also have a free pamphlet discussing copyright law as it effects small businesses and individuals.

Copyright Enters the Digital Age: The Digital Millenium Copyright Act

In 1998, Congress passed the Digital Millenium Copyright Act, known as the "DMCA".  The Act had several portions that served to update a great deal of the law as it applies to computer-related copyright matters.  One part amends U.S. copyright law to comply with the World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO Performances and Phonograms Treaty.  These two treaties were adopted in 1996, and include provisions known as the DMCA anti-circumvention provisions, which changed the remedies for the circumvention of copy-prevention systems and required that video recorders have built-in copy prevention devices. 

A second part of the DMCA relates specifically to limiting the liability of certain entities for online copyright infringement.  This portion, known as the Online Copyright Infringement Liability Limitation Act, creates what is known as a "safe harbor" for online internet service providers.  This shields the service providers against copyright liability if they adhere to and qualify for certain prescribed safe harbor guidelines and promptly block access to allegedly infringing material (or remove such material from their systems) if they receive a notification claiming infringement from a copyright holder or the copyright holder's agent. 

A third part of the DMCA modifies the copyright act to permit those repairing computers to make certain temporary, limited copies while working on a computer, without violating any copyright. 

There has been over a decade of criticism of the DMCA and how it effects copyright holders and others.  Some have said that the DMCA makes it too easy for copyright owners to ask a website to take down copied material, even if there is no likely infringement liability.  When website owners receive a takedown notice it is in their interest not to challenge it, even if it is not clear if infringement is taking place, because if the potentially infringing content is taken down the website will not be held liable.  Some have criticized the DMCA's copy prevention portion as preventing the fair use of copyrighted materials, such as copying for educational uses.  And researchers in cryptography and data protection complain that the DMCA hinders their work.  There is some movement in the legislature to amend the law in response to these criticisms. 

Let us know if you have any questions on the DMCA.  Send us your questions or comments, or post them on the blog.  The email is JDellinger@mainspringlaw.com.  We also have a free pamphlet discussing copyright law as it effects small businesses and individuals.