4 Things to Know About Copyright Litigation

by Ned Sackman

There are certain copyright issues that regularly come up for businesses. They sometimes appear in different ways because copyright law is always developing — like this recent case against the Andy Warhol Foundation — but the root issues remain the same.

Copyright infringement is defined as “when a copyrighted work is reproduced, distributed, performed, publicly displayed, or made into a derivative work without the permission of the copyright owner.”

Whether you are an “author” or creator of the original expression in a work, the “owner,” who has written agreement of assigned copyrighted material, or a business, let’s start with the basics. Here are four things to know about copyright litigation.

1. If you are interested in pursuing legal action for copyright infringement, before doing anything else, you have to register your copyright with the U.S. Copyright Office.

Although an author’s rights to copyrighted material accrue as soon as it is created, litigating to enforce those rights requires registering the work with the U.S. Copyright Office. Processing time for registration depends on a number of factors but averages 2.1 months, and will take longer if submitted via mail. There is a “special handling” option under which, subject to approval and with compelling reason, you can pay an additional fee to have registration expedited and the Copyright Office aims to process the claim within five working days.

2. If you didn’t register before the infringement started, you cannot recover attorney’s fees or statutory damages, although other damages are still available.

In the situation where you have registered, you are permitted to recover the attorneys’ fees incurred in pursuing litigation to protect your work and statutory damages between $750 and $30,000 per infringement in the normal course. If you can prove the infringement was willful, available statutory damages increase to $30,000 to $150,000 per infringement.

If you haven’t registered, you are still allowed to recover actual damages, which typically relate to the amount the author could’ve licensed work for if the infringer had negotiated for permission to use the work, and non-duplicative infringing profits based on how much money the infringing party made using the work.

3. Beware: you might not actually own the copyright to the content on your website.

If you hired a third party to create content for your website and you didn’t have a “work for hire” agreement, then you might not own the content you created. That is because the owner of the copyrights in a work is the author in the first instance. There are rules that apply to works employees create for their employers, but those rules often do not cover content that third parties create. Because creation of website content is often outsourced, this is a common issue.

Similarly, many websites display images that were located via Google Search or a similar service. Unless the website owner obtained permission from the owner of the image, the use of the image likely amounts to copyright infringement. There are websites that offer images for free or unlimited access to a library of images for a modest price, so this issue can be avoided with proper planning.

Ideally, you should know where all the images on your website came from and have a copyright clearance system in place.

4. You can be sued for infringement that occurred years ago.

Copyright infringement has a long tail. That is because of something called the “discovery rule.” There is a three-year statute of limitations on copyright claims, but the discovery rule provides that the statute does not begin to run until the owner of the copyrighted work reasonably should have discovered the infringement.

Returning to the website image example — it is entirely possible that an infringing image may appear on a website for years before the owner hears about it, and only then would the statute of limitations begin to run unless the owner had reason to know about the image earlier. Moreover, there are tools, like the Internet Archive Wayback Machine, that allow anyone to review historical versions of a website, meaning it is often very simple to show what appeared on a website at a given time.

The good news is that these issues are all much easier to address if dealt with ahead of time. Understanding who owns the copyrights in the material your business uses and spotting the issue of negotiating rights to images ahead of time will go a long way.

Attorney Ned Sackman, a litigation shareholder at Bernstein Shur, works out of the firm’s Manchester office and specializes in commercial litigation, dealer-side automotive, and intellectual property matters.  This article was first published in the NH Business Review.