MEMO

FROM:Joshua Kaufman, Esq. Chair, Venable's Copyright, Unfair Trade & Entertainment Group

RE: U.S COPYRIGHY LAW IS DIFFERENT: BEWARE 

U.S. copyright law for much of its history has differed greatly from that found in the EU and most other developed countries. The United States’ attitude has been generally anti-creator/pro-business. This bias was reflected in the formalities imposed, which if not carried out with specificity, caused creative works to fall into the public domain. For example, the U.S. had a shorter term (28 years) of copyright, notice requirements, registration, and numerous other restrictions. At some point in the 1980s it dawned on the United States that as the largest importer/exporter of intellectual property in the world, it would behoove it to join the mainstream. Up until that point in time, the U.S. shunned becoming a member of the Berne Convention, which is almost universally acceded to by most developed countries in the world since it was originally enacted in 1886. The United States finally succumbed a little over a decade ago and became a member, albeit a somewhat reluctant member, of the Berne Convention. In joining, the U.S. felt that it would be better able to influence the future direction of international copyright law. Implementing legislation was enacted and became effective in March of 1989. A subsequent round of enabling legislation became effective after the Uruguay Round’s revisions (TRIPS). Even though the U.S. has moved more into the mainstream, there are still several areas in which it remains fundamentally different in its laws from those of most other developed countries. This results in lawyers and companies that are used to dealing in the international copyright arena running afoul of U.S. Copyright Law when doing business in the United States. A few of these differences are highlighted below.

Work for Hire

In the United States, when an employee, in the scope of his or her employment, creates a copyrightable product, the employer, not the employee, is deemed the author for copyright purposes. No assignment of rights or other types of waivers are required. Automatically, by operation of law, the employer is deemed the author both as to ownership and for registration purposes. It is as if the individual who actually created the work does not exist. This is called "Work-For-Hire." On the other hand, if an independent contractor is specially hired to create a work, in order for it to be a "Work-For-Hire," the relationship must be designated in writing prior to the creation of the work. When independent contractors are used, the "Work-For-Hire" status is only available if the specially commissioned work is a contribution to a collective work, part of a motion picture or other audio visual work, a translation, supplementary work, a compilation, an instructional text, a test, answer material for a test or an atlas.

Any other transfer of ownership of a copyright must be by "Assignment," which also must be in writing. The duration of a copyright in a "Work-For-Hire" is 95 years from the year of its first publication or a 120 years from the work’s creation, whichever expires first.

Moral Rights

Under the Berne Convention the granting of moral rights (Droit Moral) is broad and comprehensive. Additional moral rights are found in the national laws of many countries. The United States has always resisted the granting of moral rights to any creator. However, as a result of its signing the Berne Convention, it was required to at least make a prima facia display of compliance. As a result, Section 106(A) was added to the Copyright Act. It provided for moral rights only in a "Work of Visual Arts." The copyright law defines a "Work of Visual Art" as, "a painting, drawing, print, or sculpture, existing in a single copy, in a limited edition of 200 copies or fewer that are signed and consequently numbered by the author, or, in the case of a sculpture, in multiple casts, carved, or fabricated sculptures of 200 or fewer that are consecutively numbered by the author and bear the signature or other identifying mark of the author; or as a still photographic image produced for exhibition purposes only existing in a single copy that is signed by the author, or a limited edition of 200 or fewer that are signed and consecutively numbered by the author." The act specifically excludes posters, maps, globes, charts, technical drawings, diagrams, models, applied art, motion pictures, audio visual works, books, magazines, newspapers, periodicals databases, electronic information services, electronic publications or similar publications, merchandising items, advertising, promotional descriptive coverings or package material or containers, any work for hire or any work that is not subject to copyright protection.

The type of works protected under U.S. Moral Rights is much narrower than those found in most of the world. If a work is deemed to be a "Work of Visual Arts" then the author has the right to claim authorship of that work and to prevent the use of his or her name as the author of any work of visual arts which they did not in fact create. The author has the right to prevent the use of his or her name as the author of a work of Visual Arts in the event of a distortion, mutilation or modification of the work which is prejudicial to the reputation of the artist. The artist further has the right to prevent any intentional distortion, mutilation or other modification of a work that would be prejudicial to the artist’s reputation or honor. The artist also has the right to prevent the destruction of a work of recognized stature and also any intentional or grossly negligent destruction of a work of recognized stature.

The duration of the moral rights last only as long as the author is alive (there is an aberration in the law which says that if a work was created before June 1991 and the artist has not parted with title of the art work, they receive life plus seventy). The artist’s moral rights cannot be transferred, however, they can be waived in writing.

Registration

The United States has always had a copyright registration procedure. The underlying theory behind it is that the Copyright Office is part of the Library of Congress and, in order to ensure that the Library of Congress is a depository of the United States’ cultural heritage, it was imperative that copies of all creative works (i.e., those subject to copyright protection) be deposited with the Library of Congress.

Over time, the incentives used to encourage deposits have varied. At present, registration is generally a prerequisite to filing suit for an infringement, but the real benefit that the copyright at law provides in regard to registration is the granting of attorney’s fees and statutory damages in infringement suits. Only if a copyrighted work has been registered with the Copyright Office prior to an act of infringement is the copyright owner entitled to receive attorney’s fees and statutory damages upon the successful conclusion of their claim. The amount of the attorney’s fees and statutory damages are left to the Court’s discretion and as such the nature of their awards vary widely on a case-by-case basis. Unlike most other systems, even if you prevailed in a copyright case, if you had not registered your copyright prior to the infringement, you would not be entitled to recover any attorney fees. Also the general measure of damages ("actual damages") in a copyright case is the loss to the copyright owner and the allocable portion of the profits of the infringer. In many situations the amount of recoverable damages (especially for copyright infringement uncovered early on) may not be great. As such in the vast majority of cases unless a registration has taken place before the infringement it will not be financially viable for a copyright owner to go to court to protect their copyright as the legal fees will often far exceed any possible recovery. On the other hand, if a registration has taken place prior the infringement, attorney fees and statutory damages (statutory damages can be awarded for willful infringements up to $150,000 per infringement) make most cases financially viable. A further incentive for registration is the process itself; it is simple and inexpensive. Registration requires the completion of a relatively simple form (unless you are dealing with computers programs, trade secrets or websites), the deposit of one or two copies of the work and a filing fee of only US $30.00.

Online Infringement

With the advent of the Internet, many new copyright issues have cropped up. One of the principle issues that required attention was the liability of the Online Service Provider (OSP). As hundreds of thousands of websites were being mounted, the OSPs’ who hosted these sites simply could not and did not review the material contained on their sites. As would be expected, a significant amount of copyrighted material was being posted, often without the permission of the copyright owner. Obviously the party, who reproduces the unauthorized copyrighted material electronically and posts it might be liable. However, the question, "Would the OSP also be liable?" arose. The OSPs argued that it is simply impossible for them not only to view all of the materials on their sites, but have any way of ascertaining whether or not it was subject to copyright protection, or even if it was whether a license had been granted to the OSP’s customers. Under pre-existing non-electronic case law, liability could easily attach to the OSP. As such the United States passed specific statutes dealing with liability for an OSP the Digital Millennium Copyright Act (DMCA) and developed a process to insulate an OSP from liability while protecting copyright owners rights. The regulations are complex and detailed. In summary, the first obligation of an OSP is that they must register an agent to receive Notice of Infringement Claims with the U.S. Copyright Office. A list of agents is available at the Copyright Office or on their website. If one believes that one’s copyrights are being infringed upon on a website, one can send a "takedown letter" to the listed agent. The OSP is then required to remove the infringing materials. The OSP does so without any risk of exposure or liability to the website owner whose materials are being removed. The OSPs are then obligated to notify the website owner of the claim of copyright infringement and takedown demand. The website owner then has the ability to file a counter-notification in which the owner states that the works are not infringing and must agree that owner will allow himself to be sued in an appropriate Court. If an OSP receives a counter-notification, they are required to put the questionable works back up unless an injunction is sought, then the parties fight it out in court. The OSP that complies with these requirements is immune from liability. My experience in dealing with scores of these matters is that when one finds an infringing work on a website and the OSP sends a "taken down notice" to the website owner rarely is there a counter-notification. This process is a very effective way of having infringing items expeditiously removed from websites. However, if one improperly institutes a take down then one is liable for damages and attorney’s fees.

While the United States has moved toward the mainstream of copyright protection it still has many quirks and nuances that are unique to it and present pitfalls for the non-U.S. entity doing business in the United States (or even having its website viewable by U.S. citizens).

If you have any questions regarding U.S. Copyright feel free to contact me at (202) 216.8538 (direct dial), (202) 962.8300 (facsimile) or [email protected]