IP for your business: Copyright infringements the unseen danger

R. David Donoghue Jan. 24, 2010, 1:27am

You likely spend significant resources making sure you do not infringe your competitors' patents, trademarks and copyrights. No legitimate business would intentionally copy its competitor's manuals, or confidential business plans.

But despite that, many businesses are unknowingly infringing a wide range of copyrights each week as a part of their employees' normal corporate activities. A media relations associate may photocopy news articles about the company or its competitors and distribute them to key executives who require the information.

Another may add key articles to board books in preparation for a board of directors meeting. A sales director may make a company-focused parody of a popular song to rally the sales force and boost sales. Or an engineer may copy a chapter or two of a useful engineering text.

In each of these cases, if you asked, the employee would be surprised to learn they were infringing a copyright. But it is not just the infringement, they are also exposing themselves and the business to significant liability. And your employees would be shocked to learn that no matter how slight the infringement, the maximum statutory damages for infringing a single copyrighted work is $150,000.

$150,000 for copying a single article.

Even more shocking to most people is that forwarding a newspaper article via the internet for business purposes is also generally an act of copyright infringement.

It is easy to imagine the all-too-common scenario. You, as your company's president or general counsel, receive a letter demanding that the company cease and desist its infringement, in this case the alleged forwarding of an email newsletter for which the company had only purchased a single use license.

After some digging, you learn that the forwarding was done by Jim in sales, at the direction of his immediate supervisor Sue. Both Jim and Sue are floored. All they did was forward copies of an email newsletter that they had legitimately purchased, and that their entire team needed.

Unfortunately, neither Jim nor Sue appreciated that forwarding the publication was only allowed if they purchased a group license. Because they had forwarded one copy a week for twenty weeks, the company's potential infringement was $150,000/weekly copy or $3 million.

Most of all, the entire incident could have been avoided if the company had implemented a copyright compliance program. When I put on copyright compliance programs for clients they are routinely amazed at how inexpensively and quickly we are able to both fix current issues like these and prevent future problems before they happen.

While you should consult a qualified lawyer to make sure your copyright compliance program is comprehensive and correct, here are the basic steps that are required:

Audit copyright use and policies

Start by auditing your corporate use of copyrighted materials. Depending upon your company's size, you can do one company-wide audit or do audits by division or product line. Consider how you internally and externally use third party publications like trade magazines and newspapers.

Are you routinely photocopying copyrighted material to distribution lists? Do you pdf and forward copyrighted materials? Do you have a corporate policy in the employee handbook explaining how you expect employees to handle copyrighted materials?

If you do, when was the last time you reminded your employees of it? Do you have reminders posted at copy machines and pdf stations? Also, look at how your employees use the internet. Forwarding links is generally fine, but copying and pasting internet content can get you in trouble.


Once you have a realistic understanding of your corporate copyright use and any areas of concern, you need to educate your employees about copyrights. In my experience, a presentation made directly to your employees in small groups of no more than 20 is exceptionally effective.

By laying out the copyright laws and the consequences of breaking them for the employees themselves and the company, you will accomplish two things: 1) you quickly stop some unintentional copyright infringement; and 2) copyright issues that you may not have identified in your audit rise to the surface.

It is critical that as part of your employee education you give employees a way to raise private questions about potential copyright issues. When I give copyright compliance seminars, I have found that one series of 90 minute client-to-employee presentations can lead to two to three days of identifying and resolving potential copyright issues with the employees. But it is three days that can remove millions of dollars in future corporate liability.

Ask permission

Ask permission. This is the simplest step of a copyright compliance program and perhaps the least followed. When you need to use copyrighted material, ask permission first. If you ask the copyright holder for permission to use, forward or reprint their material they often agree.

More often than not they are so happy that their content is useful to you that there will be only a moderate change, or none at all. The simple act of seeking permission will significantly reduce your copyright risk footprint.

Consider a copyright clearance center license

If you find that your business requires employees to internally copy, distribute or forward copyrighted content like newspaper and magazine articles or textbooks, consider a copyright clearance center ("CCC") license.

The CCC was created by a group of copyright holders to license "incidental" use of their copyrighted content. Those copyright holders that join the CCC are paid a portion of license fees from the CCC licenses. In return, the licensees are free, depending upon the particular license chosen, to copy and forward content that is part of the CCC.

The license is priced based upon the size of your organization and gives access to a significant amount of copyrighted content.

Rinse, lather and repeat

Finally, do not just set up your copyright compliance program and forget it. Continue to watch for copyright issues. Make sure to continue employee education. At least every year, remind employees of your corporate copyright policy by memo or email.

Offer all new employees your copyright compliance program, as well as offering a periodic refresher for current employees. Post reminders of your copyright policy at copy machines and pdf stations where accidental infringements can be prevented.

The more you incorporate copyright compliance into the fabric of your company, the safer the company will be from the expensive threat of copyright infringement.

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