Wednesday, February 19, 2014

Put Up Yer Dukes, Infringer

There was a long discussion on Linked in recently about registering groups of copyrighted images, and eventually copyright in general, and as is usual with these discussions a whole lot of conjecture, opinion and misinformation mixes in with the facts and sorting one from the other can be difficult. The first thing we want to do is get the nomenclature correct:

1. “Copyright” is a legal concept that grants the creator(s) of an original work exclusive rights to it’s use for a specified period of time. Copyright can be shared, assigned, divided and sold (and it may be owned by your employer if you have one). In countries that apply the Berne Convention standards the creation of the copyright is automatic upon placing your idea into a fixed form, i.e. on paper, sculpt, canvas, jpg, video, etc.

2. “Registration” of your copyright provides public evidence that you own the copyright and gives you certain rights in a court of law to (attempt to) obtain damages and recoup legal fees if someone infringes upon your copyright.

PLEASE don’t say that you are going to “copyright” your work with the US Copyright Office (it is not a verb), the copyright already exists and you are going to “register” that copyright. Using the correct terminology will help to understand the concepts. So here’s the problem – the government grants the registration but makes no judgment about the originality of the work, nor will they defend the validity of the registration or the rights of the copyright holder. The scrap of paper they give you is only as good as YOUR ability to defend it.

So, outside of the fact that some licensing agreements will require it, why register your copyrights?

It has been said that the only reason to register your copyrights is so you can be awarded legal fees when you need to enforce your copyright. Simplistic but not entirely off base either. A valid copyright registration not only looks nice on your wall but it is a tool, a club that can sometimes be used to bring an infringer into compliance due to the threat of damages and fees being levied against them in court. And it works great as a club until they pull a gun on you (or more accurately a fat bank account) and decide to fight.

If we are going to bandy about terms like copyright, register, copy, infringement and lawsuit, then let's be realistic about the arena you are playing in: the U.S. legal system, where anybody can sue anyone for anything and defending Intellectual Property (IP) can be particularly messy. Infringers can challenge the originality of your work or the validity of the registration, or both. They can claim Fair Use or first to publish and make you prove otherwise. Licensees can claim ownership of a copyright or claim an artist’s style as trade dress (trust me on this one). Welcome to IP litigation.

If you're caught lifting somebody's wallet it’s pretty clear that you did it. But when someone claims that your design kinda looks like the green one they created sixty days before you registered the copyright on the purple one, and you licensed it to their competitor causing them irreparable harm in a certain market segment and they sue, and you disagree - it’s gonna get really expensive. The average cost of a copyright action (for royalties under 1 million) is over 200,000 dollars BEFORE it reaches trial and almost 400,000 if it goes to trial. For royalty amounts over 1M it is over 500,000 and just under 1M if it goes to trial, and it climbs from there (from the American Intellectual Property Law Association). The costs are staggering and IP litigators do not usually work on a contingent fee arrangement because 1) there are often no insurance companies to settle with and 2) the outcome is NEVER assured in an IP case. So that means hourly attorney rates in the 200 to 500 dollar range, research and discovery costs, doc prep, expert witnesses, court costs and more, all of it coming due on monthly bills. For the next year or two.

So here’s what I think:

- Register your copyrights, it’s cheap. And do it early.
- Keep a record of everything you send out – what to who and when.
- Never assume. In our experience (and we get knocked off regularly) most domestic corporate infringements occur at a low level and many are mistakes, so before leveling accusations start from a position of compromise - try to turn the infringer into a customer and execute a contract with back royalties.
- ALWAYS act on infringers, starting with “friendly” contact and escalating as necessary. If you can’t get to agreement, consider working with an attorney to put together a minimal cost cease and desist letter.
- The majority of art licensing infringements will not merit the cost of litigation since you are likely dealing with royalties in the hundreds or a few thousand range. Make a business decision, not an emotional one, about whether you should pursue legal action. Get used to the idea that sometimes you will just have to walk away. Yes, it sucks.
- Think very carefully before crowdshaming, it can work but it can also leave you open to serious liability, and you cannot shame a real crook because they just don’t care (or overseas factories when you can’t figure out who they are).
- Be unique, because being the first to market with a signature look is the cheapest protection you can get.

Please note: I am not an attorney nor do I play one on TV. The plan here is to explain some concepts in real life terms, NOT to give legal advice or to argue the finer points with some PO’d attorney who is now fuming after reading this… even though that may be kinda fun.