Get Started Now

A Complete Guide to Copyrights for Businesses

Written by Chris Daming, J.D., LL.M.
test1 long

A Complete Guide to Copyrights for Businesses

Written by Chris Daming, J.D., LL.M.
10 min read

This guide helps you better understand copyrights. You'll learn what can be protected, does it make sense to register your work, who owns the work, how to register, and how to protect your copyrights.

The main reason to register your work for copyright protection is to protect the work from others using it. You automatically are granted some protections when you create your work. But, registering a copyright gives you additional recourse if you decide to sue someone infringing on your copyright.

The simplest question is, “Will you sue someone if they infringe on your copyright?” If the answer is no, then registering your work probably doesn’t make sense. And if the answer is yes, it probably does make sense. But you can learn about all that in this guide.

Do you have something that can be copyrighted?

The first thing you need to know about copyrights is whether you have something that is actually copyrightable. This is a three-part question. You need to ask:

  • Is the work original?
  • Is it tangible?
  • Was any level of creativity involved in making it?

If the answer to all three is yes, then your answer is yes, you have something that is copyright-able.

To be even more direct, here is a list of things that you can copyright (if you make them): advertisements, books, essays, manuscripts, screenplays, scripts, directories, photographs, greeting cards, sculptures, jewelry, glassware, videos, film strips, sound recordings, engineered drawings, architectural drawings, drawings, songs, software, codes, designs, catalogs, and compilations of any of these.

What “Can’t” I Copyright?

If you read the list of things you can copyright, you’ll notice that it’s pretty long. This might make you wonder, what can’t I copyright?

You can’t copyright anything that isn’t original or isn’t tangible. Original means no one has made the thing in the way you did before. Tangible means it is something you can hold but keep in mind that electronically stored things count, too (videos, websites, recordings, all count as tangible). If the thing is something that would have been tangible before the internet, and it’s on the internet now, it counts as tangible. If you can give the thing to someone in a way that doesn’t require you to speak it out or act it out, it is probably tangible for copyright purposes.

To really hammer home this point, here are some key examples. You cannot copyright an idea, a method, system, process, fact, logo, slogans, name, dance move, expression, short phrase, articles of clothing, scientific principles or discoveries, or untranscribed speeches.

Determine if You Own the Work (Copyrights)

If you are the author or creator you are also likely the owner. This only becomes more complicated when you hire someone or are hired to create work for someone else.

If you hire someone to create work for you, first ask if they are an employee or an independent contractor. If they are your employee, and the creation of the work was part of their job, then you are considered the author of that work. You own the copyright.

If they are not your employee and they are an independent contractor there is a two-part test to determine who owns the copyright. In legal jargon, you own the copyright if it is a “work made for hire.” A work made for hire is: A work that is specifically ordered or commissioned; and Is being used as a part of a collective work, part of a motion picture, a translation, a supplement, a compilation, an instructional text, a test, answers for a test, or an atlas.

If your work meets these two tests and you have a written agreement that specifies the job is a “work made for hire,” then you own the copyright in the work created by the independent contractor.

Determine if the Work Should Be Registered (Copyrights)

Make a personal and/or business decision about whether you should register for copyright protection. When you think about registering your copyright, you need to think of it in terms of a future lawsuit. To do this, think:

  • How important is this copyrightable thing to my business?
  • How much business would I lose if someone else duplicated the thing?
  • How much money would I need to recoup to recover from that lost business?

The reason you need to think about this is because copyright registration determines how much you can recover in a future lawsuit. In a copyright lawsuit you can recover two types of damages:

Actual and Compensatory

You can recover the money that you lost due to someone else duplicating or using your work. (This person is called the infringer because they’ve infringed on your copyright.) Proving actual damages is tough, requires a detailed legal analysis, and (a lot of times) isn’t even worth the cost of a lawsuit.

Statutory

Statutory damages help where A&C damages can’t. Congress wanted to protect copyright owners in the Copyright Act so they created a special type of damages for infringement suits. These damages are between $750 and $30,000 per infringement.

Even better, an infringement suit doesn’t require that you prove the infringer knew that they were infringing. If you can prove that, you can recover up to $150,000 per infringement plus punitive damages (these are the kind the court awards to punish the defendant for their bad behavior.)

If you sue someone for infringement before you register, you can only recover actual damages. If you someone after you have registered you can recover actual and statutory damages. Except in very limited circumstances, you cannot even bring a lawsuit for infringement until you’ve registered your copyright.

Example

Will wrote a book about the struggles of launching a successful app. He wanted to take advantage of the attention he was been getting for his app and convert that into some extra money from selling his book. He told his frenemy Chet about it, who begged him for a copy of the manuscript so he could offer some pointers.

Will sent it to Chet, who posted it on his website for people to download for free. When Will was about to launch, he asked Chet to take it down to make sure people didn’t just download that free version. Chet declined, so Will had to wait until his copyright registration was finished so he could sue Chet to force him to stop.

Will could have avoided this had he registered his copyright earlier.

 

Apply for Copyright Protection

Copyright protection is time-sensitive. If you do not register it before an infringer duplicates it, you’ll recover much less in a lawsuit. Copyright registration also takes away the defense that the infringement was accidental.

It is good practice to mark your copyrighted works with a ©, followed by your name, and the year the work was completed. This isn’t a legal requirement but it does offer some legal protection. The © notifies any potential infringers that your work is copyrighted. In any future lawsuit this will help you recoup damages and stop the infringer from claiming ignorance.

The © does not mean that your work is registered with the U.S. Copyright Office. If you have works that are copyrightable and works that you should copyright, you need to register them with the U.S. Copyright Office. To register copyrights:

  1. Visit the USCO’s online portal
  2. Complete the online forms;
  3. Enter your payment information; and, 
  4. Upload copies of your work. 

In about a month, the USCO will send you a certificate verifying your copyright registration! 

Protect Your Copyrights

You protect your copyrighted works by watching out for duplicates of your work (there are plenty of online services that will help you do this) and notifying infringers every time you see them. 

If your work appears on a host site like Etsy or Youtube, you’ll send a “Takedown Letter” to Etsy. Etsy can’t be sued for copyright infringement but they are required to remove infringing works from their website once they’re notified they exist. This is the law known as the Digital Millennium Copyright Act. Each of the major host sites will have information about the DCMA and Takedown Letters on their own website.

If your work appears on an independent website you’ll want to send a Cease & Desist Letter to the business. Send your letter through certified mail to be sure that you know when it was received. If you have an email address of the business, you should also send a copy through email.

Regardless of which letter you send, make sure you include:

  1. A description or image of your copyrighted work;
  2. A description or image of the infringing work;
  3. The location where you found the infringing work;
  4. Your contact information; and,
  5. A statement that you are making the request in good faith, under penalty of perjury, the information in the letter is accurate, and that you are the owner of the copyright. 

Keep copies of all correspondence and monitor the website where the infringing work appeared. 

Copyright Mistakes to Avoid

 

Fair Use: Make Sure You Don't Infringe on Other Copyrights

Under Fair Use, you can use other people’s copyrighted material for free if it’s for commentary, critique, reporting, or educational purposes. However, that’s just the first part - and other factors like the kind of work used, what you’re using it for, how much of it is being used, and the effect that your use has on its marketability will be considered in determining if it’s “Fair Use.”

Does this apply to me?

Yes, if you use copyrightable material that you don’t own.

Why is making this mistake going to harm my business?

This can harm your business because once you go beyond fair use in your use of copyrighted material without someone’s permission, you’re infringing on their copyright. This opens you up to liability. You may be sued for copyright infringement which could lead to sizable damages.

You could avoid this by:

The best tip to make reduce the possibility of falling into copyright infringement is to just get the permission of the owner if you plan on making money, directly or indirectly, off of his work. Other than that, you can do 4 things:

  1. Limit the amount of the original you use to just what’s necessary to your purpose;
  2. Make sure you’re not giving away the valuable aspects of the original work;
  3. Transform it as much as you can;
  4. Make sure you’re using it for the purposes allowed under fair use.

Example

Will wrote an e-book about his struggles when he was making his app. He was giving it away for free as this was his way of giving back after the huge success of his app. Will’s goal for the book was to make it easier for other people to launch their own apps. So what he did was to gather the books he read while making his app and essentially condensed the key secrets of each book into his own ebook.

His thought process was that he’d provide the nuts and bolts of each of those books for free so others wouldn’t have to spend money and waste time to learn the lessons he learned. To avoid liability, Will made sure to diligently cite each of his sources in his ebook.

A week after the release Will started getting emails from the publishers of the books he “cited,” demanding that he take down the ebook and that he pays damages for making adaptations that gave away for free what others originally had paid for. Will was being sued for damages on the grounds that people that read his ebook for free would’ve purchased the books cited in the ebook. So those published books lost out on considerable profit.

Will could have avoided this if he simply got in touch with the publishers or the authors of the content he put in his e-book. This would’ve allowed him to either use the content or not, but either way he needed to get their permission. And if he had reached out to them, he could’ve avoided this liability.

 

 

Make Sure You're Protected from Your Website Users Infringing on Other Copyrights

What does this mean?

If you allow anyone to post anything on your website, including in a comments’ section, you open yourself up to copyright infringement issues. In a nutshell, if someone posts someone else’s copyright on your site, you could be liable for that infringement.

And it makes sense - imagine you operated a website called “Freebooks-R-us.com” and you profited from advertising. People visited your site to download free books that other users uploaded onto it. You could claim that you didn’t personally infringe on the copyright -- it was your users -- but clearly you were profiting from the infringing. So, for these kinds of reasons, you could be liable.

Does this apply to me?

If you have a website or provide online services like transmitting or storing works that can potentially be copyrighted, then yes.

Why is making this mistake going to harm my business?

Failing to prevent or take action on infringement by users on your site may cause you to be held liable for copyright infringement by your users. If they store, transmit, make illegal copies of, or do something else involving the copyrighted materials through the services you provide, you might be on the hook yourself. Not only that, but generally, if you know about infringement that is occurring on your site and either don’t do anything about it or make money directly off of the infringement, then you will not qualify for those safe harbors.

You could avoid this by:

You can avoid this by getting a good understanding of the concept of and making sure you qualify for the DMCA safe harbors. At a minimum, you should have systems in place to address copyright infringement by your users in your website like a provision in your Terms of Use saying you can get rid of infringing content they put on your site, and also responding promptly to take-down notices.

Example

Will has a website he uses to promote his app. On his app, each user has their own public profile page where they can post about their experiences or questions they have about the app.

Chet, a user of Will’s product, decided to promote his own product by posting about it on his profile on Will’s website. To attract more link clicks, Chet posted popular ebooks on his page and links to download the PDF of the ebook.

Not long after, the publishers who owned those books demanded Will take down the pages. Will, however, made the mistake of promising to never take down any profiles or comments for transparency purposes. The publishers then sued Will for copyright infringement.

In this case Will would likely be held liable for at least secondary infringement even if he did not even know what Chet posted. He could have avoided this by making sure he had enough control over user actions that would enable him to comply with any future take-down notices.

 

 

 

 

 

 

Chris Daming, J.D., LL.M.

Written by Chris Daming, J.D., LL.M.

Chris is the founder and CEO of LegalGPS. Previously, he served in the Army (82nd Airborne), then went to law school and got his J.D. and LL.M. He practiced law and ran the Startup Legal law firm before founding LegalGPS.