In our last blog post, we discussed using trademark registration to protect a very important business asset: the business brand. Next, we will highlight one way to protect another business asset: the content a business creates. One way to do this is through copyright protection.
What is a copyright?
A copyright is a protectable intellectual property right in original works of authorship. In other words, if you are the original creator of a book; a photograph; a painting; a movie; or software code; then you may likely have a copyright interest in such works.
When is a copyright created?
Somewhat similar to trademark rights, where a right is created based on use of a mark, a copyright in an original work of authorship is created once the work is created in a fixed, tangible form. For example, if you simply speak the words of an original, improvised poem out loud, you have likely not created a copyrighted interest in such poem. The poem is not yet in fixed form. If the same poem is written down, or recorded, then it has a fixed form that likely entitles its creator to copyright protection.
How can a business protect its right in its content?
After an original work has been put into fixed form, it may be a good idea to explore registration of the work with the U.S. Copyright Office. Registration puts others on notice that the work is registered. It notifies others that the work was created by a particular author on a particular date, or that the work has been assigned to someone other than the original author.
Also, and perhaps most importantly, before an author can file an infringement suit against someone who has illegally claimed the work, the work must be registered. Similarly, a work must be registered before the infringement occurs, or within three months of publication of the work, before the owner of the work is entitled to statutory damages and attorney fees.
Does a business own all the content that its employees create? What about any content from an independent contractor?
To use a phrase every law student hears throughout law school: it depends. Not all content created for a business is necessarily a business’s asset. Questions need to be asked such as: who created the content, an employee or an independent contractor? Does the work fall within the employee’s scope of work? Is there an employment agreement or independent contractor agreement foreseeing this issue?
Preventing Business Disputes
Clarifying ownership interests in business content is one other reason one may want to consider formalizing a business structure. For example, imagine that Kelly has a great idea for a new mobile phone app. Kelly asks Pat, Kelly’s software development friend, to develop the program for the app. The app is a huge success, but a dispute arises as to who has the right to claim ownership of the app.
The simple scenario explained above is all too common. If Kelly had planned ahead, a business plan could have been formed to clarify ownership of the work from the beginning. A business entity, such as an LLC (limited liability company) or a corporation could have been formed with ownership rights in the work. Kelly and Pat could have formed the business together as joint owners, or Kelly could have hired Pat as an employee of the business whose job is software development. Kelly could have entered into a written agreement with Pat for Pat to create the software as a work for hire, or to assign any of Pat’s rights in the work to the business.
It is no secret that disputes over ownership of business assets can be fatally destructive to a business’ long-term viability. The expense – both emotional and financial – can be overwhelming. Care taken to prevent disputes before they happen is often time and money well spent.
This blog is made available by Gaydos, Churnside & Balthrop, P.C., for educational purposes, and to give general information and a general understanding of the law. Nothing contained in this blog post should be construed as to provide specific legal advice. By using this blog you understand that no attorney client relationship has been created between you and Gaydos, Churnside & Balthrop, P.C. This blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.