5 Things to Know About Copyrights

Just this week my best friend asked me if she should file a U.S. Copyright registration on her company’s new tagline. It’s a common question and a good one, too. I like it when entrepreneurs ask questions first, because it is the best way to avoid spending precious business cash on initiatives that get you nowhere rather than somewhere.

Here was my answer: No!  Business tag lines, company names, trade names and marketing slogans are covered by trademark law, not U.S. Copyright law.

U.S. Copyright registrations cover written works such as books, poetry, newspapers, articles, scores and scripts.  U.S. Copyright law also covers sound recordings, films, paintings, cartoon characters, photographs, stained glass designs, architectural drawings, board games, puzzles and choreography, website user interfaces and more.

Perhaps the most surprising trend in copyright filings is for software technologists to file a U.S. Copyright registration on software code in addition to filing patent applications on their innovations.  The purpose for the extra filings is to expand the entrepreneur’s legal fire power in a low cost way.

Here are five things to know about U.S. Copyrights:

No. 1: What a © notice means.  Most first-time entrepreneurs assume that their works are covered by copyright law once they affix a © notice on the work or at the bottom of a website page.  Not so!  New works are covered by U.S. copyright law from the moment they are “fixed in a tangible medium of expression.”  This means that copyright protections exist from the moment an original work is put on paper, published on a website or committed to a digital format.

No. 2: Filing a U.S. Copyright registration is easy. You can register your works online with the U.S. Copyright office for just $45.  If ownership issues are straightforward, there is no need for an attorney’s help too.

No. 3: Registrations last a long time.  For new works owned by a business, U.S. copyright registration lasts 95 years from the date of publication or 120 years from the date of creation, whichever is shorter.  If the work is owned by an individual, then the copyright lasts for the creator’s lifetime plus 70 years.  U.S. Copyright registrations are necessary to maximize legal protection.  The primary value of a U.S. copyright registration is the ability to sue infringers for financial penalties and attorneys fees.  You can seek statutory damages only if you register for a U.S. Copyright within 90 days of the work’s publication date or before the infringement begins.  In cases of “willful” infringement, you can seek actual damages or statutory damages up to $150,000 plus attorney’s fees.

No. 4: Beware of ownership gotchas.  Unless otherwise agreed in writing, if your company hires an independent contractor to write software code, create cartoon characters, write manuals or take photographs, then the business doesn’t automatically “own” the work for copyright purposes.  That’s right.  Even if your company pays the independent contractor to develop the new work, the “author” and owner of the work is the independent contractor, not your company.

The best way to minimize the risks of litigation or misunderstandings with independent contractors is to obtain an immediate assignment of all intellectual property rights, including copyright, before any work begins.  If a contractor is unwilling to sign a formal assignment agreement, then hire another contractor.

No. 5: Understand “made for hire” issues.  For copyright purposes, the “author” and owner of a work is the employer if the work was “made for hire” by a salaried employee.  Still, I encourage all business owners to take extra steps to clarify intellectual property ownership issues by having all new employees sign an assignment of intellectual property on the date of first hire.  Business owners can also incorporate assignment language into employee handbooks.

To learn more about U.S. and international copyright law, talk to a knowledgeable attorney who specializes in intellectual property law or visit www.copyright.gov.

Susan Schreter  is a 20-year veteran of the venture finance community and entrepreneurship educator.  She is the founder of www.takecommand.org, a community service organization that offers a centralized database of startup and small business funding sources in the U.S.   Follow Susan on Twitter @TakeCommand.