Troy & Schwartz Attorneys-At-Law

Introduction

Intellectual property assets (patents, copyrights, trade secrets, and trademarks) can be sold, assigned, or licensed by the IP’s owner.   For companies, IP ownership issues may arise where steps are not taken to ensure that any IP created by or developed by an employee or independent contractor will belong to the company or hiring party.   Such issues could have a devastating effect on the company under a variety of scenarios as discussed below.  As such, every employee of a company should be required to sign a confidentiality and IP assignment agreement as a condition for employment.  Such an agreement obligates the employee to keep confidential the proprietary information of the business, both during employment and after the employment ends.  The agreement also ensures that any inventions, ideas, creations, business plans, logos, brands, trade secrets, copyrightable works, or services developed within the scope of his/her employment during the term of employment belong to the company and not the employee.

Similarly, all independent contractors should be required to sign a confidentiality/non-disclosure agreement.  If their efforts on the company’s behalf could result in an IP asset(s), the independent contractor should also be required to sign an IP assignment of rights agreement.   Examples  of IP-related works often developed by independent contractors are: APPs, software programs, prototypes, formulations, websites and logos.

Of all the four types of IP, ownership issues involving copyrights are arguably the most misunderstood as the result of the copyright law’s work made for hire doctrine as defined in 17 U.S.C. § 101.

Copyright Ownership as the Result of a Work Made For Hire

Copyright law may seem deceptively simple compared to patent and trademark law especially with regards to the registration process.  Where copyright law can get particularly complicated for the unwary, however, is in the area of copyright ownership.  Under U.S. law, the creator or author of the work is the owner of the copyright.  But what happens if the work was created by and employee in the scope of his/her employment or by an independent contractor who was hired or commissioned to create the work?

Regarding an employer-employee relationship, the work is generally treated as a work made for hire wherein the employer (and not the employee) is deemed the author and owner of the work.  The forms for federal registration of a copyrightable work include a section addressing ownership secured on the basis of a work made for hire.

Regarding an independent contractor relationship, the work may qualify as a work made for hire providing two conditions are met pursuant to the Copyright Act (Act).  First, the work must fall into one of the nine enumerated types of works specified in the Act.  Second, the independent contractor and the hiring party must have also both signed an agreement agreeing that the work to be created is a work made for hire.  If both of these two requirements are met, the hiring party is deemed as the owner of the work created by the independent contractor.

Note the difference between works made for hire by an employee versus those made by an independent contractor.  In the latter case, the type of works qualifying as work made for hire are limited by statute and a written assignment agreement is required for all such “statutorily” defined works made for hire.

What happens if the work created by the independent contractor does not fall into one of the nine enumerated types of works in the Act?  An assignment of rights agreement executed by the independent contractor will be required for the hiring party to “honestly” claim copyright ownership as the claimant in a copyright registration application.

Why the Distinction Between and Employee and an Independent Contractor Is Important

Take the scenario of software developers who are often hired as independent contractors by startup companies.   Software can be copyrighted, but software is not one of the enumerated types of works qualifying as a work made for hire work by Independent Contractors.  Therefore, even with a written agreement stating that the software is a work made for hire, the hiring company will not actually own the copyright to the developed software under the Act even though the software developer (independent contractor) was paid to create the software.   That is, the software developer may well still be the owner of the software despite the work made for hire agreement.   On the other hand software development companies such as Microsoft Corporation that have employees dedicated to developing software are the owners/authors of any copyright-related rights in the software under the work made for hire doctrine.   See the U.S. Copyright Office Records for Microsoft Corporation’s registered copyrights where Microsoft is listed as the author of the work as the result of an employer work made for hire.

Copyright ownership issues as they relate to independent contractors may remain hidden and then arise: 1) when a business is being sold and the sale involves intellectual property (IP) assets such as copyrights; 2) in a copyright infringement lawsuit; 3) or a business is being evaluated by venture capitalists or other investors or is involved in an M&A transaction.    The buyer of IP assets will want assurance that the IP assets are indeed owned by the seller so that they may be effectively assigned to the buyer by a written instrument signed by the seller and the buyer.   A deal could fall through if the seller cannot prove to the buyer’s satisfaction that it – the seller – is the owner of the copyrights and therefore has the right to transfer ownership to the buyer.

As for a copyright infringement lawsuit, standing is a requirement for bringing a lawsuit, namely that the plaintiff is the true copyright owner.   A defendant in a copyright infringement lawsuit may be able to use “lack of ownership” as a defense if the work was created by an independent contractor and the work does not qualify as a work made for hire under the Copyright Act.  That is, ownership remains vested in the independent contractor and plaintiff does not own the copyright it claims is being infringed under the law.  The author of this blog has successfully used lack of ownership of the registered work as grounds for dismissing a copyright infringement lawsuit.

As for scenario #3, the buyer’s due diligence team will also be looking for these agreements with employees and/or independent contractors to ensure that the copyrights (and all of the company’s IP) is owned by the company.

Ensuring the Legally Sufficient Transfer of a Copyright by an Independent Contractor

What steps can be taken to ensure the proper transfer of copyright-related rights from an independent contractor?  Where the work(s) to be created clearly fall into one of the nine enumerated classifications specified within the copyright statute, the  hiring company should require the independent contractor to sign an agreement wherein the work(s) to be created is designated as a work made for hire with all associated copyright-related rights belonging to the hiring party.  This agreement should be executed by both the company and the independent contractor before work on the project commences.

Copyright ownership can also be transferred by an assignment of rights.  For her clients, the author includes an assignment of rights provision within all work made for hire agreements with independent contractors as a precaution to cover the situation where the created work may be found to not qualify as a work made for hire after all.  Thus, if for whatever reason the work should not qualify as a work made for hire because, e.g., it does not fall into one of the nine enumerated categories, the hiring party would still own the copyright as the result of the independent contractor’s assignment of rights to the hiring party.   17 U.S.C. § 201(d)(1).  Any such assignment needs to be clear as to the rights being conveyed and the nature of the underlying works.     For a good discussion of how important an assignment of rights provision may be where the work made for hire conveyance by an independent contractor fails, see Capital Concepts, Inc. v. Mountain Technology Corp., et al., WL 6761880 (W.D. Va. 2012).  In our software development example, the assignment agreement should also state that the independent contractor is assigning any and all patent and trade secret rights to the company since software may also qualify for these types of IP protection.  That is, the company/individual hiring an independent contractor needs to ensure that it is the owner of all potential IP rights emanating from the independent contractor’s work.

We are proud of the legal services we provide to our business and entrepreneurial clients on all matters related to intellectual property law including trademark law.  Contact us at 305-279-4740 to discuss any questions related to IP including ownership questions.   

Troy & Schwartz, LLC

Attorneys-at-Law

Miami, Florida  (305) 279-4740

Where Legal Meets Entrepreneurship™

This blog is for informational purposes only and does not constitute legal advice.

© 2023 by Troy & Schwartz, LLC

On June 6, 2022 a copyright infringement lawsuit was filed in the U.S. District Court for the Central District of California over the new blockbuster film Top Gun Maverick by the heirs of deceased Israeli author Ehud Yonay.  The lawsuit involves a relatively unknown area of copyright law – the recapture doctrine – codified in § 203 of the Copyright Act.  This law gives authors and their heirs the right to recapture ownership of valuable copyrights by “terminating” past assignments and licenses of copyrighted works starting at the end of the 35th year from the date of the grant and for five years thereafter.  The process is complex and requires a notice to the copyright holder as well as the filing of documents with the U.S. Copyright Office.   Recapture is available even if the original grant was for the entire life of the copyright.  The doctrine is attended to provide the copyright owner and heirs with the right to seek new opportunities to receive financial compensation for their copyrighted works.  Such an option is particularly desirable where the copyrighted work’s value has increased over time as is the case here.  The Top Gun Maverick plaintiffs are seeking an injunction and compensation.

Paramount, the movie’s producer and distributor, allegedly secured the exclusive motion picture rights to the author’s copyrighted story which resulted in the release of the first Top Gun film in 1986.  The plaintiffs assert that Paramount knowingly failed to re-acquire the rights to the requisite film and ancillary rights to the author’s copyrighted story prior to the completion and release of the 2022 sequel as a derivative work.  That is, Paramount knew it didn’t have the rights to the sequel but moved ahead with production and distribution anyway.

Mr. Yonay owned the original copyright in the story “Top Guns” which was published in a 1983 issue of California magazine.   The magazine piece described the high-adrenaline world of jet pilots at the US Navy’s “Top Gun” fighter training school. Yonay also later wrote a book, “NO MARGIN FOR ERROR: The Making of the Israeli Air Force.”

Paramount acquired the copyright to Yonay’s story immediately following its 1983 publication which resulted in the release of the 1986 film.  The copyright’s termination of the copyright became effective on January 24, 2020 or within the 5-year window from 2018, the 35^th year following the story’s publication.  The copyright claimant for Yonay’s story was not, however, the author himself but “California Magazine.”  The registration listed in the complaint is for a copyright in a “serial publication,” with California Magazine seemingly claiming authorship under the work-made-for-hire doctrine according to the registration.  See copyright registration no. TX0001213463.

It is unclear whether this underlying registration helps the plaintiffs.  Copyright laws are applied according to the territory in which the lawsuit is filed.  Registration of a work in the U.S. is a prerequisite for the commencement of a copyright infringement lawsuit since the U.S. Supreme’s decision in Fourth Estate Pub. Ben. Corp. v. Wall-Street.com.  Plaintiffs, who are not U.S citizens, may argue that U.S. registration of Mr. Yonay’s underlying story which resulted in the California article is not necessary for foreign nationals and the lawsuit should proceed.  Even if this assertion is found to be a valid basis for proceeding with the lawsuit without registration, the Plaintiff’s will likely need to allege as such under U.S. law.

Also, many of the complaint’s allegations appear to involve the expression of ideas that would fully be expect to be present in any story or film about combat military pilots, in this case navy pilots.  Copyright law does not protect common themes which appear across different works, e.g., romantic themes, works involving detectives, love songs, impressionism in art, etc.  Thus, even if the Plaintiffs pass the “copyright registration” threshold issue, they may have a very difficult time proving actual copyright infringement.

One of the more interesting allegations in the Complaint suggests that the famous scene in the original Top Gun movie where Maverick and Goose’s F14 plane is inverted over a Russian MiG was the author’s original expression. The 1983 California magazine article does reportedly show a photograph with one F-14 plane inverted atop another plane but the article credits a C.J. Heatley as the photographer.  The Complaint makes no mention of Heatley or the photograph and it is not clear from the story whether the “inverted plane orientation” is the author’s original expression and the photograph is a secondary expression which captures the literary expression to add “color” to the story.

This case will either be thrown out early on due to the registration issue without addressing “copying” issues or it will be drawn out.   Dates will be critical since Paramount is maintaining that the sequel was “sufficiently completed” prior to the copyright termination date of January 24, 2020.  Work on the sequel began in 2018.  The plaintiffs allege that the movie was completed in 2021 or well after the copyright’s 2020 termination date. “Big screen” release was postponed until May 27, 2022 after the movie was completed in 2021 because of the pandemic. Mr. Yonay passed away in 2021 or after termination of the copyright.

Plaintiffs contend that they originally sent Paramount a “termination of rights notice” in 2018 based on the 1983 magazine’s publication date.  However, Paramount allegedly ignored the letter apparently believing that the termination was ineffective because they had acquired the rights from the California magazine and not Mr. Yonay himself.  Instead, Paramount moved ahead with the very lucrative sequel.  It’s not clear who advised Paramount on the potential seriousness of this matter in 2018 but that this lawsuit has now been filed should have come as no big surprise.  The heirs now surprisingly are seeking to share in the financial bounty of a terrific movie which may owe its existence to a story written by their loved one almost 40 years ago under a legal doctrine that allows such redress.  Whether or not their claim of copyright infringement will pass muster remains to be seen.

The lawsuit will also likely call into question the underlying contracts between Paramount and California Magazine and California Magazine and Mr. Yonay.  It is noted that if a contract includes a waiver of termination rights by the copyright owner, such a waiver is generally unenforceable.

Stay tuned for periodic updates as the case progresses.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY                    AND IS NOT LEGAL ADVICE.

Intellectual property law is a complex area of the law.  Contact us at 305-279-4740 for a complimentary consultation on protecting your inventions, creative works, brands, and proprietary information through patents, copyrights, trademarks and trade secrets or our litigation services involving intellectual property disputes.   We represent both individuals and business entities.  Our mission is to serve innovators and creators in protecting the fruits of their hard work and ingenuity through our Client Services Creed:  Conscientious, Rigorous, Energic, Empathetic, and Diligent legal services. 

© 2022 by Troy & Schwartz, LLC

On Feb. 24, 2022 in a 6 to 3 decision, the U.S. Supreme Court held that mistakes of law – and not only mistakes of fact – could protect copyright infringement lawsuit plaintiffs from losing their copyrights on grounds of inaccurate registrations.  The decision is a win for creators who own registered copyrights.  Remember, since 2019, copyright registration is an absolute requirement for commencing a copyright infringement lawsuit as the result of the Supreme Court’s decision in Fourth Estate Public Benefit Corp. v Wall-Street.com, LLC.

Background of the Lawsuit

In 2020 Unicolor, a fabric design company, sued fashion giant Hennes & Mauritz, LP (H&M) for copyright infringement of Unicolor’ copyrighted 2-dimensional fabric designs.  Unicolor’ registered copyright stemmed from its copyright registration for 31 separate designs allegedly included in the same unit of publication.  The Copyright Office’s regulations governing the submission of applications provides that a single application may cover multiple works only if they were “included in the same unit of publication.” The opportunity to submit multiple works in one application can save the applicant considerable filing fees.  H&M argued that Unicolor had failed this requirement by making some of the designs exclusively available to certain customers while offering the rest to the general public.  That is, the designs were not included in the same unit of publication.

The Relevant Statute

The Copyright Act includes the following statements under section § 411(b):

(1)  A certificate of registration satisfies the requirements of this section and section 412, regardless of whether the certificate contains any inaccurate information, unless—

(A) the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate; and

(B) the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.

(2) In any case in which inaccurate information described under paragraph (1) is alleged, the court shall request the Register of Copyrights to advise the court whether the inaccurate information, if known, would have caused the Register of Copyrights to refuse registration.

The Decision

The Unicolor case involves interpretation of § 411(b)(1)(A), commonly referred to as a safe harbor provision.  The District Court determined that because Unicolor did not know when it filed its application that it had failed to satisfy the “single unit of publication” requirement, Unicolor copyright registration remained valid by operation of the safe harbor provision.  The Ninth Circuit disagreed and instead opined that the safe harbor provision only applied to good-faith mistakes of fact, not law.  Unicolor had known the relevant facts surrounding publication of the designs; its knowledge of the law (or lack   thereof) was irrelevant

The U.S. Supreme Court sided with the District Court by holding that 411(b)(1)(A) is applicable to both mistake of law and mistake of fact.  As such, lack of either factual or legal knowledge can be the basis for the application of the statute’s safe harbor provision.

In finding for Unicolor, the Court found that cases decided before § 411(b) was enacted “overwhelmingly” found that inadvertent mistakes in copyright registration did not invalidate copyrights.  The court also referred to the legislative history which suggested that § 411(b) was enacted to make it easier, not more difficult, for nonlawyers to obtain valid copyright registrations.  One of the goals behind the new section was to “improve intellectual property enforcement in the United States and abroad.” H. R. Rep. No. 110–617, p. 20 (2008).  Section 411(b) did so in part by “eliminating loopholes” that could be exploited to block otherwise valid copyrights.

H&R had argued that copyright owners would be allowed to avoid the consequences of an inaccurate application by claiming lack of knowledge.   The Court emphasized that courts need not accept the copyright owner’s claim that it was unaware of the relevant legal requirements.  For example, willful blindness may support a finding of actual knowledge on either the issue of law or fact, triggering the application of 411(b)(1)(B).

The Court’s opinion did not address section 411(b)(1)(B) which states: “the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.  Section 411(b)(2) makes it clear that any decision concerning the validity of a registered copyright is not made by the court but by the Register of Copyrights.  This step is generally commenced upon the court’s grant of a defendant’s motion to Submit the Matter to the Register of Copyright and then submitting the matter to the Register of Copyrights. Based on Unicolor, the Register of Copyrights should only be involved if the court finds that the copyright registrant had knowledge of the facts and/or law associated with registration’s error(s).    In contrast to registered trademarks and patents, a federal court has no right to invalidate a registered copyright.  It’s up to the Register of Copyrights to determine what impact, if any, the misinformation had on the Copyright Office’s decision to register the copyright to the designated owner in the first place.

Take-Home Points

The decision helps bolster the validity of copyright registrations involving errors made by the applicant.  In the commentator’s opinion, applicants should not automatically assume that all errors are “excusable.”  Nevertheless, it’s still a good idea to ensure that all information presented in copyright registration applications is accurate to start with to prevent a situation where the defendant draws out the case by asserting the registration is invalid.  Also, where an attorney files the application on behalf of the applicant, will the attorney’s error be “excused” for errors of law?

On the other hand, defendants who think they can get away with infringement by trying to invalidate the plaintiff’s registered copyright in a future infringement lawsuit should think twice.  This approach is akin to a shoplifter blaming the retailer for not having shoplifting preventive measures in place.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  WE HOPE IT WAS INFORMATIVE.  HOWEVER, IT IS PRESENTED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE!

Intellectual property law is a complex area of the law.  Contact us at 305-279-4740 for a complimentary strategy session on protecting your inventions, creative works, brands, and proprietary information through patents, copyrights, trademarks and trade secrets or our litigation services involving intellectual property disputes.   We represent both individuals and business entities.  Our mission is to serve innovators and creators in protecting the fruits of their hard work and ingenuity through our Client Services Creed:  Conscientious, Rigorous, Energic, Empathetic, and Diligent legal services. 

© 2022 by Troy & Schwartz, LLC

This September 2021 decision addresses complex aspects of Copyright Law involving both copyright ownership issues and termination rights wherein the Creator of a work can reclaim rights in an originally assigned copyright 35-40 years after the work’s assignment.  The commentator has previously posted blogs discussing the importance of properly categorizing the work’s Creator as a work-for-hire under the Copyright Act.   Failure to do so may result in a situation wherein the plaintiff in a copyright infringement case may actually not be the owner of the registered copyright. Under such circumstances, a copyright infringement case may be dismissed because the plaintiff, as a non-owner, may not have standing to sue for copyright infringement.

The public policy underlying the Copyright Act’s termination right under 17 U.S.C. § 203 is to give Creators a second chance when the work they licensed or sold (assigned) becomes more valuable than anticipated. Improper classification of the Creator also impacts a Creator’s termination rights because the Creator of a work-for-hire cannot invoke a termination right. Disputes over termination rights often turn on an analysis of the nature of the Creator’s relationship to the work.

The defendant in Horror (Victor Miller) was the screenplay writer of the 1980 horror movie “Friday the 13th”.   The screenplay was created for Manny, Inc. which later transferred its copyright in Miller’s screenplay to Georgetown Productions, Inc.  It was Georgetown Productions that registered the screenplay as a work-for-hire.  The rights were later acquired by Horror, Inc.  In 2016, Miller notified both the “first” company which had retained his screenplay writing services decades before and Horror, Inc. that he planned to exercise his termination rights.

Horror filed an action in the U.S. District Court of Connecticut, seeking a declaration that the screenplay was a work-for-hire by an employee and not subject to termination. The district court disagreed with Horror’s position, finding that Miller had instead been an independent contractor and the screenplay did not qualify as a work-for-hire.  Horror appealed. The Second Circuit affirmed the lower court’s decision.

Employment Status Analysis

In arriving at its “independent contractor” conclusion, the Second Circuit discounted the plaintiffs’ position that Miller had been an employee at the time he wrote the screenplay.  The plaintiffs’ argument focused on Miller’s membership in the Writers Guild of America (WGA) at the time he was hired to create the screenplay as grounds for his designation as an employee and the registered work’s classification as a work-for-hire.   Miller’s original agreement with Manny was conducted under a collective bargaining agreement governing WHA’s writers and signatory employers like Manny.

The Second Circuit concluded that Horror wrongly relied on labor law’s framework defining “employee.” Instead, Copyright law controls the analysis; its concept of employment is grounded in the “common law of agency” and serves different purposes from labor law.

The Second Circuit relied on the Supreme Court’s 1989 seminal case of Community for Creative Non-Violence v. Reid where the High Court laid out the scope of employment framework for establishing copyright ownership under 17 U.S.C. § 102.   In discussing CCNV, the Second Circuit noted that “the Copyright Act uses a more restrictive definition of employment” in order to protect authors whereas labor law construes employment broadly “to serve workers and their collective bargaining interests and establishing rights” including safety and pay rights.  Thus, Miller’s membership in the WGA and Manny’s status as a signatory employer to their collective bargaining agreement did not create an employment relationship that converted the screenplay into a work-for-hire.

In determining that Miller was an independent contractor who had the right to terminate Horror’s copyright, the Second Circuit considered CCNV’s enumerated factors for establishing whether the Creator of the work was indeed an employee:

• Miller’s previous screenwriting employment and graduate degree in theater established his expertise and skill in screenwriting requiring little oversight/direction;
• Manny, Inc. never provided Miller with typical employment benefits such as health insurance of paid vacation time;
• Manny, Inc. never withheld or deducted any taxes or social security payments from the two lump sums he received for his screen-writing services.
• Nothing in Miller’s employment agreement with Manny, Inc. could be construed as granting Manny the right to assign additional projects.
• Miller was the only person credited as the screenplay writer.

Certain types of commissioned works may also qualify as a work-for-hire under the Copyright Act when the Creator is an independent contractor and not an employee but only if the Creator and the commissioning party have both signed an agreement stating that the work is a work-for-hire. Additionally, the work must fall into one of the Copyright Act’s nine enumerated classifications for this type of work-for-hire.  Screenplays are not one of the enumerated classifications. Here, the agreement between Manny and Miller never specified that the screenplay would be a work-for-hire.  Even if the screenplay would have qualified as one of the enumerated classifications, the absence of the required agreement eliminated any chance of establishing the screenplay as a work-for-hire under the “independent contractor” scenario.

As a result of the Second Circuit’s decision, Miller now has the right to terminate his copyright.  He will presumably try to negotiate a licensing agreement seeking royalties commensurate with the movie franchise’s success.

Comments

Copyrights enjoy a long lifetime but  nobody has a crystal ball.  Parties who are contemplating obtaining the rights to a copyrighted work(s) should consider the money-making potential with the knowledge that the work’s Creator (including his/her estate) could seek to terminate the copyright 35-40 years into the future. Parties who are acquiring the rights as a successor-in-interest should consider the possibility of termination and determine if the work was a bona fide work-for-hire: 1) by an employee; or 2) via a “work for hire” agreement signed by both the Creator/independent contractor and the hiring party for certain classifications of works.   Why?  Because a “true” work-for-hire is not eligible for termination.  On the other hand, independent contractors may not wish to have their work designated as a work-for-hire and instead assign the rights in return for monetary compensation to preserve their termination rights.

As the Horror decision shows, a registration which specifies a work as a work-for-hire does not necessarily make it so. Had this been a copyright infringement lawsuit brought by Horror against another party, chances are that an astute copyright infringement attorney would have challenged Horror’s ownership and standing as the owner of the registered copyright.  Why?  Because the Creator was never an employee.  Nor would the work  have likely qualified as a work-for-hire under the “independent contractor” alternative provided for under the Copyright Act.

Copyright law is complex even though at first blush it appears relatively simple due to the ease of completing a copyright registration application.  However, numerous pitfalls abound for the unwary and even the issuance of a registration does not mean that the registration is absolutely immune from problems as the Horror decision demonstrates.

Copyrights can be extremely valuable intellectual property assets.  Make sure you understand the pitfalls to avoid problems down the road where your ownership may be questioned or the Creator may have the right to exercise termination rights.   Contact us for a complimentary consultation on your copyright matters.

WE THANK YOU READING THIS BLOG AND HOPE YOU FOUND IT INFORMATIVE.  HOWEVER, THE CONTENT IS PROVIDED FOR INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE OR AN ATTORNEY-CLIENT RELATIONSHIP.  

©2021

Troy & Schwartz, LLC

Where Legal Meets Entrepreneurship™

(305) 279-4740

In 1998 Congress enacted the Digital Millenium Copyright Act (DMCA) to address the copyright issues arising because of Internet usage.  Section 512 of the DMCA protects online service providers (OSPs) and website operators from inadvertent copyright infringement.  For OSPs, this protection involves:

• Taking them off the hook for transient infringing transmissions passing through their computers;
• Provides a safe harbor if the ISP promptly removes infringing material at the owner’s request; and
• Relieves them from liability for unknowingly linking to a site that does contain infringing material, except they may be required to identity an alleged online infringer through a subpoena.

For website operators, the DMCA provides that website operators are immune from copyright infringement if:

• They don’t have actual knowledge of the infringing materials on their services;
• Don’t receive a financial benefit directly attributable to the infringing materials; and
• They implement and comply with any takedown procedure. This means that the website should include wording stating that it adheres to the DMCA and provide contact information for a DMCA agent.

One of the first cases to test the DMCA’s reach involved Google/You Tube as the Defendants in a lawsuit brought by Viacom. Viacom argued that YouTube actively encouraged the distribution of infringing content owned by Viacom, it was disqualified from immunity under the DMCA.  Google argued that it and YouTube has immunity under the DMCA’s safe harbor provision.  Google prevailed. Viacom Int’l, Inc. v. You Tube, 676 F.3d 19 (2d Cir. 2012).

          The DMCA Take Down Procedure   

All website operators should ensure that the content they use on their website is original.  If it is not, then they should get permission from the copyright holder to make use of that content or use the content only under a license. When hiring a website developer, it is important to ensure that the developer does not use works (photos, sound recordings, images, etc. owned by another in the website).  Such unauthorized usage of photographs or other images could result in problems for the website owner down the road.  Any authorization the website designer claims he has may not accrue to the website owner.  Accordingly, specific authorization for the website owner to use such content may be required.

Where a website or platform displays user-generated content over which the website owner has no oversight, the owner should have a DMCA policy in place.  This policy will ideally explain how the website owner manages copyright complaints and takedown notices. The website owner presumably expects others to respect and honor its own intellectual property rights.  It is only proper that the website owner will respect the intellectual property rights of others by promptly removing or disabling access to any allegedly infringing content upon receiving a proper take down notice.  The DMCA policy should be part of the website’s term and conditions.

To commence the “takedown” or “removal” of infringing content by a third party such as a website owner or OSP, the owner of the allegedly infringing must send a notice, typically to the designated DMCA agent.  Any old notice won’t work.  It must meet certain criteria known as elements to qualify as a proper DMCA takedown notice.  These elements are:

• The signature of the copyright owner’s owner or agent authorized to act on behalf of the owner.  The signatory should designate whether they are the copyright owner or the owner’s agent.
• Clear identification of the work(s) being infringed.  This may include providing a link to a website or other location where the work is being legally displayed.  It is suggested that the copyright owner attach a copy of the copyrighted work a copy of the registration.
• Clearly specifying the infringing activity and the location of the infringing activity on the Site.  This includes providing the web address (URL) indicating where the infringing activity is occurring.  A copy of the infringing material or web page where the infringing material resides should also be provided to aid in the removal of the infringing material.
• Contact information: The takedown notice should contain the notice sender’s contact information including the sender’s email address, address, and telephone number.

The following two elements relate to the takedown notice sender’s forthrightness and honesty.  The Site owner is under no obligation to comply with a false or exaggerated takedown notice or any other defective notice.

• Good faith belief: The takedown notice should include a statement that the notice sender has a good faith belief that use of the material in the manner complained of is not or has not been authorized by the copyright owner who has the sole right to authorize such usage.
• Accuracy of the notice sender’s statements: The takedown notice should include a statement that the information in the takedown notice is accurate, and under penalty of perjury, that the notice sender is authorized to act on behalf of the copyright owner. Providing false information and making a false claim is punishable under federal law, and those making false notices can be sued and held civilly liable.

The foregoing applies to takedown notices sent to website owners.  However, OSPs can also become involved should they receive a takedown notice.  Here, the OSPs often do not determine if there is actually infringement occurring on the website accessible through the OSP.  Instead, they typically make sure that the DMCA notice contains the information required by law.  If they take down content, the website owner must be notified.  At that the point, the website owner can ask for more details and even file a DMCA Counter-Notice if a false or erroneous DMCA claim is expected.  As with the good faith and accuracy statements of the takedown notice, the counter-notice must also include similar statements.

Finally keep in mind that a  takedown notice may not necessarily be making a valid a claim about copyright infringement.  For example, does the notice refer to content on the website that is actually from the public domain?

Call to Action

Have a website but no DMCA policy?  Have you received a takedown notice? Do you believe a website owner is infringing your copyright?  Contact us at 305-279-4740 or sdtroy@troyandschwartzlaw.com or DM me on Linkedin for a complimentary consultation.

Disclaimer

THANK YOU FOR READING THIS BLOG.  IT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE.  IF YOU HAVE A SITUATION THAT MAY HAVE LEGAL CONSEQUENCES, YOU SHOULD CONSULT WITH AN ATTORNEY OF YOUR CHOOSING.