Latest Developments in  Copyright Law

Luckily, working through this onslaught of legalese is not impossible, and in the end, you will be armed with the knowledge and power to protect your work and your wallet.

Copyright Basics

As defined by Black’s Law Dictionary, a “copyright,” strictly speaking, is “the right to copy a work, specifically, a property right in an original work of authorship (including a literary, musical, dramatic, or other work) fixed in any tangible medium of expression, giving the holder the exclusive right to reproduce, adapt, distribute, perform, and display the work.” Copyright protection, however, does not cover your ideas, concepts, procedures, processes or discoveries. Nor does it extend protection to names, titles, short phrases, slogans or symbols, among other things. Some of these forms of expression, however, may be protectable under either patent or trademark law, which you may apply for along with copyright protection in order to protect certain works in their entirety. An example of this could be a commercial you created and filmed for a local store. You can copyright the lyrics and score of the background jingle, while the store’s name and logo may be protected under trademark law.

The Copyright Act of 1976, the most recent legislative overhaul in the field, states that in order for a work to be “fixed in a tangible medium of expression,” it must, according to Nolo’s Law Dictionary, be “recorded in some physical medium, whether on paper, canvas, disk, or computer hard drive.” By the same token, any work that is spontaneous and unrecorded, such as an improvised jazz solo performed at a club or a best man’s extemporaneous speech at a wedding, is not eligible for copyright protection.

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Usually, the owner of a copyright is the vauthor,” or creator of the original work. Some exceptions to this exist, however, when a written agreement directs the author to assign the copyright to another person (e.g. a publisher) or where a work is “made for hire,” discussed below.

Finally, according to 101 of the Copyright Act, a “derivative” work is defined as “a work based upon one or more preexisting works.” In other words, a derivative work is its own, independent creative work that was derived from and includes major copyrighted elements of some other, previously created work.

Work Made For Hire

The Copyright Act states that a work “made for hire” is (1) prepared by an employee within the scope of his or her employment; or (2) specially commissioned to be used in one of nine specified categories, accompanied by a written and signed agreement between the parties expressing that the work shall be considered “made for hire.” On its own, this language is vague, but the United States Supreme Court case, Community for Creative Non-Violence v. Reid (1989), clarified the concept.

In CCNV v. Reid, a sculptor was hired and paid by a non-profit organization to create a depiction of homelessness in a modern nativity scene over a subway grate. The hiring organization made the base of the sculpture, suggested people to use as models, and assisted throughout the process by suggesting changes to the piece. The parties did not discuss the issue of copyright ownership and in the end the hiring organization claimed to own the piece. The sculptor disagreed and filed an action for a determination of ownership. The court, in discussing the employer-employee relationship in this context, analyzed the hiring party’s influence on the project. To determine whether the copyright to the sculpture was owned by the sculptor, the case enumerated several factors that courts ought to consider: the amount of skill required for the job, the source of the tools and instrumentalities, the duration of the relationship, the presence of employee benefits, the hiring party’s tax treatment of the artist, the right of the artist to employ his own helpers, the right to assign additional projects and the location of the work. The sculptor won the case because the court determined he was not an employee for purposes of the Copyright Act.

In a more recent decision by the Third Circuit, Marco v. Accent Publishing. Co., Ed Marco, a freelance photographer, shot photographs of jewelry for Accent Magazine. Accent supplied the jewelry and props, sketched the shots, retained the right to have Marco re-shoot unsatisfactory photographs, and occasionally sent its art director to pick and pose live models and suggest “more light.” However, Marco shot most of the pictures in his own studio on his own time and without anyone present (other than the occasional live models). These photos appeared in every monthly issue except one for the duration of his business relationship with Accent. Moreover, Marco was paid $150 per photograph, an additional $450 per month for all photographs used in connection with the monthly issue, did not receive employee benefits, and did not have taxes withheld on his behalf. Marco claimed that he owned the copyrights to the photographs and that Accent required a license in order to republish them, while Accent claimed that the images were made for hire, so Accent had no need for a license.

The court considered the factors enumerated in CCNV v. Reid in analyzing this case and found that Marco’s relationship was that of an independent contractor given his sporadic assignments and non-full-time status. Further, the control Accent exercised was merely over the subject matter, whereas Marco controlled most other aspects of the work (choice of light source, filters, lenses, camera, film, perspective, aperture setting, shutter speed, and processing techniques.) It is important to note that Marco and Accent did not discuss copyrights and licensing in their preliminary talks, and could have avoided this lengthy and expensive suit had they done so from the start. Thus, a major take-away from cases like CCNV v. Reid and Marco v. Accent Publishing. Co. is that to avoid costly litigation, it is important to clearly discuss and define each party’s rights – in writing – prior to commencing work.

Transfer of Copyright Ownership and Inadvertent Licensing

When copyright ownership is determined at the outset (e.g., in a written contract) and you, the artist, are certain you are the author of the work, you have the right to transfer this ownership right or grant licenses to third parties. Though this might seem straightforward, issues nevertheless can arise when no written declarations are made.

In the Ninth Circuit case of Effects Associates, Inc. v. Cohen involving a low-budget movie producer, Larry Cohen, and a special effects company, Effects, Cohen asked Effects to create special effects footage for a horror movie he wrote, directed, and produced. Effects, in a short letter, offered to prepare seven such scenes – including dramatic explosions and alien life forms – for a stated amount of money. Cohen agreed, but was subsequently unhappy with some of the footage and paid only half the promised amount for those scenes, refusing to pay the rest. Nevertheless, Cohen incorporated the footage into his movie. Effects sued Cohen and Cohen answered with two arguments: transfer of copyright ownership and grant of nonexclusive license.

The court rejected Cohen’s first argument, relying on 204 of the Copyright Act, which requires a transfer of copyright ownership to be in writing. Cohen suggested that this section should not apply to him, as a moviemaker, since “moviemakers are too absorbed in developing joint creative endeavors to focus upon the legal niceties of copyright licenses.” The court disagreed, stating that the writing requirement is intended to force parties to memorialize agreed-upon terms, in black and white, thereby protecting authors of creative works from misunderstandings that could result in potential loss. The court also considered the made-for-hire doctrine, further supporting its rejection of transfer of copyright ownership. Effects was not Cohen’s “employee,” and thus retained copyright ownership of its work.

The court, however, agreed with Cohen that by creating footage for his movie, Effects “impliedly granted a limited non-exclusive license” to use and distribute the work. The court reasoned that to hold that Effects did not grant such a license would mean that its contribution to the film would be of “minimal value,” a conclusion that would not square with the fact that Cohen paid nearly $56,000 for all the footage for the purpose of including it in his film. Although the judgment was in favor of Cohen, the court noted that, since Cohen did not pay the agreed-upon price for the footage, Effects could sue Cohen in state court for breach of contract. Moreover, since Effects retained copyright ownership, it also retained the right to license its special effects footage to others. Though Cohen and Effects had some written agreement in the beginning, both parties would have fared even better by discussing their rights fully, including their rights against the each other in case of a breach of contract. Thus, again, it is important to make sure you discuss your rights as fully as possible with prospective hiring parties, even the consequences of a breach of contract, in order to avoid lengthy and costly litigation.


Sampling

The practice of “sampling” involves the incorporation of a short segment of a previous recording into a new recording. Although this practice started in the realm of music recordings, it has made its way into the world of video recordings. The seminal music-related case is Newton v. Diamond, a Ninth Circuit case in which the Beastie Boys, in their song Pass the Mic, sampled three consecutive notes of jazz flutist James Newton’s Choir. Newton sued the Beastie Boys, arguing that although the Beastie Boys obtained a license to Newton’s recording of the song, they did not do the same for the underlying composition.

The court, in its analysis, made several interesting points. First, it noted that, for an unauthorized use of a copyrighted work to be actionable, the use must be significant enough to constitute infringement. In other words, the mere act of copying a copyrighted work is not enough for the copyright owner to sue – the copying must be of sufficient magnitude (a subjective standard) for suit to be filed. In this case, even though the Beastie Boys copied Newton’s Choir exactly as it was recorded, the court concluded that the use of only three notes of Choir was de minimis, or so minimal that it was insufficient to sustain a legal judgment. The court considered not only the length of the segment, which was extremely short, but its contribution to the overall composition of Choir, which was insignificant since it did not “represent” the song as a repetitive chorus or distinguishing opening riff might.

Similar types of sampling have been prevalent in videography, though there have been no cases attempting to protect such video rights. This may be because individuals who mix different video clips together to create new, derivative, works are under the radar, often being small, independent videographers, reducing the chances of expensive law suits filed against them by production companies. As an independent videographer, you should nevertheless keep in mind the legalities of sampling when you create videos for distribution. What one person might think is a minimal use of a previously recorded video, the author of the original might think is substantial enough to file suit. If a large production company wants to make an example of unlawful activity, you can be exposed to such a legal action.

Fair Use

According to §107 of the Copyright Act, “Fair Use” of copyrighted material is not an infringement, even when the copyright holder does not grant a license to use the material. The would-be infringer, though, can copy the material only for the purposes of criticism, comment, news reporting, teaching, scholarship, or research. In order to determine whether the use of copyrighted material is a fair use, the court considers four factors: (1) the purpose and character of the use, (2) the nature of the copyrighted work, (3) the amount used in relation to the copyrighted work as a whole, and (4) the effect of the use upon the value of the copyrighted work.

In the 1994 Supreme Court case of Campbell v. Acuff-Rose Music, in which the rap group, 2 Live Crew, made a parody of Ray Orbison’s song, Oh, Pretty Woman, the court determined that the rap group’s use of the first line of lyrics and “characteristic opening bass riff” was “comment” under the Copyright Act and therefore fair use. The group thus did not have to obtain permission to copy parts of the original song. The court further held that the application of the four fair use factors ought to be made on a case-by-case basis, making it easier for artists to attempt to use portions of otherwise copyrighted work, without obtaining a license, and to argue that such use is fair. A fair use defense may similarly be used in the context of videos, from two angles. You may want to ensure that nobody uses your work without permission, though keeping in mind a possible fair use defense; similarly, if you want to use snippets of other people’s videos without obtaining a license, do it in a way that invokes fair use.

Social Media

It is not often that independent videographers have access to high quality means of production and distribution for their videos. Luckily, however, it is now easier than ever to share your work with the rest of the world by uploading it on Internet-based social media like YouTube or Facebook. Such websites allow you to create individualized profiles and upload videos at no cost. Depending on the privacy settings you choose, when you using the services of, YouTube, Facebook and other social media websites, you have the option of sharing these videos with all Internet users. On the one hand, this is a phenomenal breakthrough as it allows instant and worldwide dispersion of your work at virtually no cost. On the other hand, however, this service has some adverse legal implications.

For example, YouTube, which is owned by Google, clearly states in its Terms of Service that, although, when uploading user content, you retain ownership of any intellectual property rights in the content, you nevertheless grant Google “a worldwide license to use, host, store, reproduce, modify, create derivative works [from]”, communicate, publish, publicly perform, publicly display and distribute such content.” This license continues even if you stop using YouTube’s services, though removal of the content may be possible. Facebook, which has similar terms, clearly adds that when any intellectual property, which includes photos and videos, is posted on its website, the user posting this content grants Facebook “a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content.” Facebook, however, states that this license ends when the content is deleted or your user account is closed, with the caveat that if the content is shared with other users and they have not deleted the content, Facebook retains the rights mentioned above.

It is thus important to keep in mind that when sharing videos or photographs on content-hosting websites, that content is subject to being used by the sites. If Facebook decides to sell copies of a video you post and subsequently makes millions of dollars, you will have no right to any of that money despite being the author of the work – Facebook’s terms clearly grant royalty-free licensing rights. By the same token, since you retain ownership of the uploaded content, any liability created by it falls back on you.


Defense and Remedies

The most important fact to be aware of when seeking to defend your copyright through legal action is the statute of limitations to filing a claim of copyright infringement. In other words, once the infringement is discovered, you have only a limited period of time to register your copyright in the U.S. Copyright Office and to file suit against the infringer. Criminal proceedings may be filed five years after discovery of the infringement, and civil actions may be filed within three years of discovery.

If you, the owner of a copyright, are successful in filing a timely action against an infringer, the next issue is the possibility of damages. 504 of the Copyright Act states that the basic statutory level of damages is “not less than $750, or more than $30,000 as the court considers just.” The Act goes on to state that where the infringer did so “willfully,” the court may increase damages to $150,000. However, 504 also allows “actual damages and profits,” which are calculated on a case-by-case basis. As the copyright owner, you are entitled to choose recovery of actual damages suffered as a result of the infringement, and any profits of the infringer that are attributable to the unlawful use and are not taken into account in computing the actual damages. If you own highly valued copyrights, this is a breath of fresh air, as a statutory limit of $150,000 may be insufficient. Thus, depending on the value of your copyright, it may be prudent to calculate the actual damages and profits that may have been derived from its use by the infringing party. This calculation may help decide whether to pursue statutory damages or actual damages and profits.

In On Davis v. The Gap, Inc., a 2001 Second Circuit case, Gap, Inc., a major international retailer of clothing and accessories used a photograph of an individual wearing Davis’s sunglasses (retail price at around $65 – $100) without first obtaining a license from Davis. The photo was published in major fashion and entertainment magazines, in-store advertisements, and on buses and bus shelters. Davis brought this action seeking, among other things, $2.5 million in unpaid licensing fees, a percentage of Gap’s profits, and attorneys’ fees. The Gap argued that Davis’s claim was barred because the use was de minimis (discussed above) and that he was thus not entitled to damages. The court held that the Gap’s use of Davis’s sunglasses was significant, not de minimis, since the glasses were a focal point on a widely dispersed advertisement. The court also held that Davis presented sufficient evidence of the Gap’s infringing use to recover actual damages, based on the “market value” of the use. The court did not, however, determine the market value and remanded to the lower court on the issue. This case is a nice illustration of an author of a protected work opting for “actual damages and profits” on the premise that the infringer profited greatly from the use, despite the low value of the product itself.

On other hand, consider Engel v. Wild Oats, Inc., in which the daughter of Ruth Engel, who was the owner of a copyright of a famous still-life of central park, sued defendant, Wild Oats, a T-shirt manufacturer, for printing 2,500 T-shirts on which the photograph was printed. Though the net profits and sales from these shirts (or the “actual damages and profits”) came to about $1,900, the plaintiff requested the statutory maximum of $50,000 for willful infringement or, alternatively, $10,000 for unwillful infringement. Although the defendants contended that the actual damages amount was controlling, the court stated that the plaintiff fairly elected statutory damages, which was well within her rights, and that now it was only a matter of determining the fair amount of damages. Ultimately, the court held that since Wild Oats willfully infringed, that is, it knowingly took the photograph from a book and produced 2,500 shirts on which the photograph was printed, and since 2,500 was a sizeable distribution of the infringed copyright, Engel was permitted to recover $20,000 in damages on top of $3,000 for attorneys’ fees and an injunction against future use of the photograph by the Wild Oats.

This case is an example of a copyright owner’s right to choose what form of relief will yield the highest damages. Thus, in the event that you find yourself defending your copyright and seeking damages for infringement, be mindful that statutory damages can result in an award valued much greater than the actual amount made by the infringing party. If you feel uncomfortable about this sort of result, remember the good will and status associated with your copyright. Is it something that ought to be associated with a T-shirt print or other lowbrow media, or should its use be restricted to more high-quality presentations such as books or galleries? No dollar amount can seemingly be placed on this value determination, but courts make it a point to compensate violated copyright owners fairly.

Conclusion

At the end of the day, when you are about to begin a new project, the legal implications of your actions may not be the first thing on your mind. It is important, however, to understand and be sure of your rights, especially since you may not have a lawyer reminding you to execute a detailed contract, use prior works fairly, or be wary of what you post on the Internet. Armed with greater knowledge of copyright law , you can now approach new projects with greater confidence, thereby protecting your work and your wallet. In the end, of course, if unsure of what to do, it is always best to seek professional legal advice.

Contributing editor Attorney Mark Levy specializes in intellectual property law. He has won many amateur moviemaking awards. Roman Zelichenko holds a B.S. in Financial Economics and a B.A. in Philosophy, Politics and Law from Binghamton University, and is currently a second year law student at Brooklyn Law School.