Although it has been around for hundreds of years, copyright law has of late become increasingly important to U.S. businesses and enterprises owing to the valid perception that copyrightable works constitute vital corporate assets. Statistics show that since 1977 copyright industries (i.e., industries with copyrighted assets at their core) have grown at two to three times the rate of the U.S. economy as a whole.
Yet many businesses and individual authors do not have a clear understanding of copyright law and its benefits. This article provides an overview of U.S. copyright law, including practical information that can help authors and businesses properly to maintain and, if necessary, enforce their rights in this valuable form of intellectual property. This article also seeks to promote an understanding of limitations that may be placed on the activities of business enterprises vis-a-vis copyrighted works owned by others.
The Nature of Copyright
Copyrightable Subject Matter. An easy way to define the scope of copyright is by setting forth what it does not protect. Copyright does not protect ideas; rather it protects the expression, or embodiment, of those ideas. The 1976 Copyright Act, as amended (17 U.S.C. ß 101 et seq., hereinafter ìthe Copyright Actî or ìthe Actî), provides that copyright protection does not extend to any ìprocess, system, method of operation, concept, principle, or discovery.î In addition, the Act does not provide for protection of titles, names, short phrases, and slogans. General categories of works that are copyrightable include, but are not limited to, literary works, musical works, dramatic works, graphic works, audiovisual works, choreographic works and sound recordings. Computer programs and Websites are also included in this list. Computer programs are considered to be literary works and Websites can include several of the foregoing categories of works.
Copyright protection extends to any "original work of authorship fixed in a tangible medium of expression" and copyright protection exists from the moment a work is created in some permanent form. To be protectable, however, a work must embody some modicum of originality and must be truly fixed. The terms "original work of authorship" and "fixed in a tangible medium of expression" represent statutory language that has historically been subject to varied interpretations. The Copyright Act currently explains that a work is ìfixedî when it is embodied in a copy that is "sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration." With respect to the originality requirement, the U.S. Supreme Court has noted that with the exception of works in which "the creative spark is utterly lacking or so trivial as to be virtually nonexistent," most works of authorship will be afforded some amount of copyright protection. Regardless of exactly how these terms are defined, their practical effect is clear: copyright protects broad categories of works and can be enforced from the moment an original work is created and fixed in some permanent form.
Exclusive Rights. The exclusive rights enjoyed by the copyright owneróa so-called "bundle of rights" include not only the right to make copies of the work, but also, depending on the type of work protected, to prepare derivative works based on the copyrighted work, to distribute copies of the work to the public and to perform and/or display the work publicly. In this context, exclusivity means that any third parties engaging in these same activities without the copyright ownerís permission may be liable for copyright infringement. A business that is interested in actively protecting its copyrights should work with experienced counsel to conduct an intellectual property audit. The audit can help to identify copyrighted works and give the business a better sense of who might be encroaching on its exclusive rights, which has become increasingly difficult to detect owing to the proliferation of electronic communications.
Limitations on Exclusive Rights. The exclusive rights are subject to express limitations also set forth in the Copyright Act. These limitations permit third parties to make use of copyrighted works that would otherwise be regarded as infringement. The limitations on copyright include the following:
The ìfair useî doctrine allows third parties to make use of a copyrighted work for purposes such as criticism, comment, news reporting, teaching, scholarship or research;
Libraries and archives are permitted to make and distribute limited reproductions of copyrighted works for archival purposes;
The "first sale" doctrine, discussed in greater detail below, permits the unrestricted sale of a copyrighted work once the copyright owner has made the first public distribution, and thus parted with title of a copyrighted work; and
Various "compulsory licenses" allow third parties to make copies of, distribute or publicly perform certain types of copyrighted works without the copyright ownerís express permission, provided that the third parties comply with statutory procedures and pay prescribed royalties.
Copyright Ownership and Term
Copyright Ownership and the Work Made For Hire Doctrine. The simplest way to think about copyright ownership is that initially the owner of a copyright is the author of the copyrighted work, i.e., the person responsible for its creation. Under U.S. copyright law, however, this simple explanation becomes somewhat convoluted in the context of copyrightable works created by an employee at work or specially commissioned works. In an attempt to clarify who is the rightful owner of the copyright from the moment of a workís creation, a doctrine known as ìwork made for hireî is applied. The Copyright Act states that for all works categorized as "works made for hire," the employer or other person or entity for whom the work was prepared is considered the author of that work and, therefore, the initial copyright owner.
The Copyright Act describes two scenarios in which a work created will be deemed a ìwork made for hireî for the purpose of vesting copyright ownership in the employer or a commissioning party. First, a work ìprepared by an employee within the scope of his or her employmentî is considered a work made for hire. Second, a work ìspecially ordered or commissionedî that falls into one of nine categories of works and is expressly designated by both the creator and the commissioning party as a work made for hire will be deemed a work made for hire. No other works will be considered a work made for hire but, as discussed in greater detail below, copyright ownership may also be conveyed by written assignment.
Any entity that relies heavily upon copyrighted works in conducting its business (e.g., a software development company) should work closely with copyright counsel to ensure that it acquires and maintains ownership of all copyrights significant to its business. If ownership issues are not monitored closely, a company may find that it does not have a legal right to copy, modify or distribute the very products that lie at the core of its day-to-day business operations.
Transfer of Copyright Ownership. Whereas copyrights were once considered indivisible, the exclusive rights enumerated by the copyright statute can now be conveyed in whole or in part. A copyright owner may transfer to a third party all of the exclusive rights of copyright ownership or just one of those rights (e.g., the right to distribute the copyrighted work). If rights are transferred on an exclusive basis, such conveyance must take place by written instrument signed by the owner of the rights being conveyed. All such exclusive transfers, and certain other documents that pertain to a registered copyright, should be recorded by filing the appropriate documents with the U.S. Copyright Office (the ìCopyright Officeî). Each of the exclusive rights under copyright can also be transferred on a non-exclusive basis, taking the form of a copyright license.
A distinction must be made between conveyance of copyright and conveyance of the material object in which the copyrighted work is embodied. In this regard, the copyright statute specifies that transfer of ownership of any material object in which a copyrighted work is fixed (for example, the sale of a book does not convey any rights in the copyrighted work embodied in the pages of the book). An author can sell a limitless number of copies of a book without such sales in any way transferring the authorís exclusive rights to the purchasers of the copies. This concept has been carried one step further in the ìfirst saleî doctrine under the Copyright Act, which limits the distribution right to one sale. A copyright owner can only control the first sale of the material object in which the copyrighted work is fixed. Thereafter, the Act expressly provides that the owner of an authorized copy of a work is entitled, without the authority of the copyright owner, to sell or otherwise dispose of possession of the copy. Selling a used book is therefore a legal activity.
Copyright Term. For works created on or after January 1, 1978, copyright protection lasts for the life of the author plus 70 years. In the case of anonymous works, pseudonymous works, and works made for hire, the copyright term is 95 years from publication or 120 years from creation, whichever period is shorter. For older works created from the early 1920s to 1978, the calculation of copyright term can be more difficult and the advice of counsel should be sought.
Copyright Notice and Publication
Copyright Notice. Although no longer mandatory, a copyright notice should appear on all visually perceptible copies of a work and should contain the following three elements: (1) the copyright symbol (©) or the word ìCopyrightî or the abbreviation "Copr."; (2) the year of first publication of the work; and (3) the name of the owner of the copyright in the work. Use of the copyright notice does not require advance permission from, or registration with, the Copyright Office. This notice alerts the public that the copyright owner is aware of and actively enforcing his or her rights. In addition, the notice identifies the copyright owner and the year of first publication and will prevent an infringer of the copyrighted work from asserting an innocent infringement defense. This fact makes notice particularly important in the digital environment where seemingly limitless numbers of infringing copies of a work can be produced with relative ease and where nothing is lost in the translation.
Publication. The Copyright Act defines publication as "the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending." Prior to the enactment of the current Copyright Act, publication of a work was a necessary component to securing copyright protection in a work. Whether a copyrightable work had been published was also a critical question prior to March 1, 1989, because all works published prior to that date were required to bear the copyright notice or risk loss of copyright protection. Although these facts are no longer true, publication remains an important aspect of copyright law.
Publication is still significant because many works that are published in the United States are subject to mandatory deposit requirements in the Library of Congress. This means that the owner of the copyrighted work must, within three months of publication of the work in the United States, deposit one or two copies of the work (depending on the work at issue) for use by the Library of Congress. Exempt from this deposit requirement are certain architectural and engineering blueprints, mechanical drawings, greeting cards, post cards, and stationery, speeches and sermons not published as part of a collection, automated databases available only online in the United States, three-dimensional sculptural works, prints, labels and other advertising matter, tests and answer keys.
Publication is also significant in the copyright context because it can affect limitations on the exclusive rights discussed above. For example, in the context of a party asserting fair use as a defense to copyright infringement, a court will consider, as one of the statutorily enumerated factors for determining fair use, the nature of the copyrighted work that has allegedly been infringed. The Supreme Court has held that the "nature of the work" includes a work's unpublished status, noting that "the scope of fair use is narrower with respect to unpublished works." In response to this holding, Congress clarified this standard by amending the fair use provision of the Copyright Act to state that "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 of the [fair use] factors."
Whether and when a work is published is critical to determining the duration of copyright protection for works written anonymously, works made pseudonym or works made for hire. In addition, requirements for deposit copies to accompany applications for registration of published works differ from those for registration of unpublished works.
Copyright Registration and Deposit Requirements
Advantages of Registration. Because a copyright is secured from the moment a work is created and fixed in some tangible form, copyright registration can be viewed as a legal step undertaken for the sole purpose of placing in the public record the facts surrounding a particular copyright. There are, however, distinct advantages that registration confers on copyright owners. For example, if a copyrightable work is registered within five years of publication, the information contained in the registration certificate will be deemed prima facie evidence (i.e., the burden will be placed on the defendant in an infringement action to establish information to the contrary).
In addition, if the work is registered within three months of publication or prior to an infringement of the work, statutory damages and attorneysí fees will be available to the copyright owner if a suit is brought. Otherwise, the copyright owner may only collect actual damages and lost profits. In cases of copyrighted works of U.S. origin, an action for copyright infringement may only be brought if the owner of the work has registered that work with the Copyright Office. Copyright registration also allows the owner of the copyright to record the registration with the U.S. Customs Service for protection against the importation of infringing copies.
Registration Requirements. In general, the three elements required to apply for copyright registration are:
A properly completed application form (which varies according to the type of work being registered);
A nonrefundable filing fee (typically $30.00 per work being registered); and
A deposit copy or copies of the work to be registered, if applicable, which will not be returned.
The Copyright Office now requires for all works published on or after January 1, 1978, that deposits be in a format deemed the "best edition" of the work being registered. The ìbest editionî of a work is defined by the Copyright Act as an edition of the work "that the Library of Congress determines to be most suitable for its purposes." When two or more editions of the same work have been published, the version that is of the highest quality would typically be deemed the ìbest edition.î For example, if copyright registration is being sought for a book and the book has been issued in two editions, the ìbest editionî would include, if possible, archival-quality paper, a hard cover, and a sewn binding.
Examination of Applications. Unlike the subject matter of patent applications and applications for federal registration of trademarks, works submitted for copyright registration are not compared with prior art or previous registrations to ensure that they meet minimal creativity requirements, nor does the Copyright Office engage in any form of public notice when a new work is submitted. The time it takes the Office to process an application can range anywhere from two to six months, depending on how busy the Office is at the time when the application materials are submitted. The length of the copyright registration process may not be so critical to the party seeking registration because the registration date for copyright is the day on which a complete application is submitted.
Copyrightable works abound in this age of electronic commerce and the Internet. Unfortunately, as the means for reproducing, distributing and performing copyrighted works become increasingly sophisticated and hard to monitor, acts of copyright infringement are becoming more prevalent, making copyright enforcement more difficult. In view of these realities, it is critical for businesses, organizations and other authors with significant copyrightable works to recognize how copyright law not only protects their own original works but also places limitations on their abilities to engage in certain activities with respect to the original works of others. Experienced copyright counsel can prove invaluable advice in assisting businesses and individual authors to gain such recognition and understanding.