SMHLLAW

by Kohel Haver
Partner, Swider Medeiros Haver LLP

What is a copyright?

A copyright is the right, based in U.S. law, which is reserved to the author (artist) to control copying of his/her works of original authorship. The work has to be original in some tangible form – ideas are not protected. Copyrightable works are works, which are: literary, musical (compositions and sound recordings), dramatic, graphic, sculptural, audiovisual, architectural, choreographic, etc.

The copyright is separate from the physical work. Transferring or selling the physical work does not necessarily include selling (transferring) the copyright to the work.  Copyright can only be transferred with something in writing signed by the owner.

Not every expression is eligible for copyright protection. Ideas, facts, titles, short phrases, forms, typefaces, scenes a fair, common stories & characters, and work produced by the federal government are not protected by copyright law (However, some government work is done by contract and the artist retains the rights, so it is best to check government work before assuming that it is not protected). Many works are no longer protected by copyright. Under current law copyright protection is for the life of the author plus 70 years and if crated by a non-person, a corporation, only 95 years. This law changed in 1998 and at that time the maximum protection was 75 years. Anything created before 1923 (1998 minus the 75 years) is no longer protectable. What this means to you is that you are free to use any work older than 1923 because it is no longer protected by copyright.  Warning: Some images may be protected under trademark law, so be cautious using images representing products or companies.

Requirements for copyright protection:

The work must be ORIGINAL with a minimal level of creativity to be protected. This includes any material added to a pre-existing work. Of course, you would not be entitled to claim any rights in the pre-existing work itself, unless you also created it.

The work must be FIXED in a “tangible medium of expression.”  According to the copyright laws, copyright law protects all works as soon as they are “first fixed in a tangible medium of expression … from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”

To register or not to register?  You have an enforceable copyright either way… but

A: The moment when your work is created and fixed – when your pen leaves the paper or when the light hits the film – your copyright springs to life. However, while the protection is valid, it is minimal. There is no presumption that the work is yours.  You cannot ask the court to recover your attorney fees, you can only recover your actual damages or the infringer’s profits and you do not get any of the other benefits that you receive with timely registration.

B: The Copyright Office of the Library of Congress regulates copyright registration. Registration is an inexpensive and effective way to obtain additional legal protections for your creative work. Incidentally, if your work is registered within three months of “publication”, meaning when you have shown it to, or sold it to the public the copyright office will consider your registration as if you had gotten the forms in before you published the work. This is important when calculating the damages you might ask for in a copyright infringement lawsuit.  .

C: Copyright Registration Information: The copyright information and downloadable PDF forms are at the website www.copyright.gov. This site also has a database containing many registered works.  Copyright Office, Library of Congress, Washington, DC 20559 (202) 287-9100

Copyright registration is easy

Fill out the proper application form: VA (Visual Arts), PA (Performing Arts – i.e. screenplays, notated music, programs) TX (Text-based work), and SR (Sound Recordings).

Include Deposit(s): You deposit a copy of the “best edition” available of the work. One deposit for unpublished works; two for published works.

Send the completed application to the Copyright Office with the fee, currently $45.

Be sure to retain a complete copy of everything you submit.

It is best to send your application packet by overnight mail, which automatically returns a notice of receipt or delivery.

The registration process typically takes about six months, but your registration is effective from the date that your application was received by the office.

BIG TIP: Mailing yourself a copy is not useful and certainly not as valuable as a registration.

How long does your copyright protection last?  The effective date of registration is the date your complete package, including completed forms, deposits and fee, is received by the Copyright Office. A copyright lasts for the life of the author plus 70 years, or in the case of a corporation or works created under a pseudonym, a total of 95 years.

Why register your copyright?

Legal presumption that the work is yours; proving ownership of an unregistered work is usually expensive.

Access to federal court system: Registration is required for access to the federal courts.

With unregistered copyrights you can recover only your actual damages; if the work is registered, you can ask for presumptive damages of up to $150,000 for each willful infringement. “Innocent” infringements up to, $30,000. (The registration must be effected within three months of creation, or before an infringement occurs, in order for the copyright holder to be eligible to receive these extra benefits of registration)

The right to petition the court to recover your legal fees and court costs.

Right to request the court for an injunction against further infringement including seizure and destruction of any infringing products.

In rare cases, mostly for software and movies, federal criminal penalties against the infringer.

Rights included in a copyright: A copyright is a bundle of rights

The term, “copyright,” refers to a bundle of exclusive rights, including:

Not only the right of ownership of the original work

The right to reproduce and make copies or modify the work.

The right to distribute and sell the work, or allow others to do so.

The right to prepare or license derivative works. Derivative works are versions of the work based on the original copyright. (Example:  drawings becoming action figures)

The right to perform or display the work publicly. (Example: a screen saver is a performance)

The right to control the integrity of the work and the attribution of authorship.

What is Copyright notice:     © Year, Name of Author

Since April of 1989, you are not required to place your copyright notice on your work to have a copyright in a work. However, the proper copyright information on your work provides an important notice to others considering using your work. It will allow them to find you more easily to ask permission and it will weigh into their intention if they use your work without your permission.

You are well advised to assume that work you see is covered by someone’s copyright, even if the does not have a copyright notice on it. This is especially true for images, music, or text found on the Internet. Try to determine who owns a work and ask permission (license) to use it.

Copyright infringement — Using work without permission

In order to establish an infringement there are three things you must demonstrate:

You must prove that you own the work. A copyright registration is presumptive proof that you are the author of the work.

If you do not have a situation where the works are clearly identical, you must prove that the alleged infringer had access to the copyrighted work and copied it.  If you can prove access, the standard of similarity is easier to meet; instead of substantially similar, it can be merely strikingly similar. Circumstantial evidence is typically sufficient to prove access.

3.  You must prove that the infringing work is sufficiently similar to the original copyrighted work. Similarity is considered in a 2-step process.  First “intrinsically”:  are the two works “actually similar?” Second, would an “ordinary person” see similarities between the copyrighted work and the infringing work?

The intent of the infringer does not play much of a role. Generally, regardless of the infringer’s intent, if the court finds unauthorized use of a work, the infringing party is responsible for any damages to the copyright holder. However, an innocent infringer will draw a lesser penalty.

FAIR USE – infringement, but its ok:

Not every unauthorized use of another’s work is copyright infringement. Many uses of existing works are allowed.  Fair use is a defense to a charge of copyright infringement. Fair use is using a pre-existing work for purposes of criticism, commentary, news reporting, teaching (including creating multiple copies for classroom use), scholarship, research, or parody.   A parody does not steal the original format of the work, but is a “transformative use” that transforms and reflects on the original work. 

FAIR USE Considerations:

The purpose and character of the use.  How are you using the work?   Is it for a profit or non-profit enterprise? Giving away copies does not cure this question.

The nature and character of the copyrighted work:  the more creative and unique the original work, the more difficult the defense for anyone using the original work. Works that are more common have less copyright protection.

The amount and substantiality of the portion of the copyrighted work used.  How much of the work was taken?

Do sales of the secondary work hurt sales of the original?  Are the markets for the two products similar or overlapping? It does not matter that your use may increase the market for the original work.

Best advice: get permission from the copyright holder; get license to use the work; work at SNL.

The Public Domain

No one can own the expression of a duck or an apple. They are facts and are in the public domain. Works are protected under copyright law for a limited time.  After the term of protection ends, all works enter the public domain. Public domain works are free to be used for any purpose without obtaining permission from anyone. Works in the public domain that are not subject to copyright protection include:  works with expired copyrights, works never registered under earlier laws, improperly registered works, and certain works of the federal government. 

Works where the copyright has expired are no longer protected by copyright are in the public domain.   The copyright laws have changed over the years and the date of creation or publication will determine which law applies. The public domain date is holding at 1923 and will open up in 2019 due to the 1998 copyright extension, which added 20 years to all protected copyrights. Any work published before that date is considered to be in the public domain.

Use of work with Permission: Licensing and sales of your copyrights:

Consider a small bundle of sticks:  the type of use, length of use, exclusivity of use, territories of use, etc.  This bundle can be removed from the larger bundle of rights pertaining to a copyrighted work and licensed out.  This allows the author of the work to retain the remaining rights in their work, while generating income from parts that they have sold or licensed to others. 

NOTE: Transfers of all the rights in a copyright MUST be in writing to be valid. Only non-exclusive transfers may be verbal agreements. 

Permissions or Licenses are CONTRACTS 

A contract is an exchange of promises or performances creating legally enforceable obligations between two or more parties. Generally, there is a benefit to the promisor and a detriment to the promisee with both parties assuming certain duties.

CONTRACTS – BASIC ELEMENTS:

Parties to the contract.

The identities of the parties should be clear.

Each party must have the capacity to enter into a binding contract.

Agreements made by minors or the mentally impaired are generally voidable.

Nature and subject matter of the agreement:

A clear description of the essential terms of agreement between the parties: what, where, when, and how the parties’ promises are to be completed.

Carefully describe each party’s responsibilities and rights.

The subject matter of the contract cannot be anything illegal. If so, it is void.

Valid contracts contain definite terms, such as prices and times for performance.

Consideration: 

Each party must give the other something of value, such as a mutual exchange of promises, forbearance or loss of a right, or money. Gratuitous promises are voidable (not binding).

Mechanics of the Offer:

Offers must be made in a manner that properly conveys the intent of one party to form an agreement with another.

Similarly, the recipient party must give clear acceptance of an offer.

Acceptance can be assumed if one party performs based on the offer of another.

For merchant agreements, the parties’ course of dealing might show acceptance.

Either party’s failure to make a proper offer or valid indication of acceptance could invalidate a proposed contract.

Rejections kill offers and offers lapse if not accepted within a reasonable time.

Generally, counteroffers reject the original offer, but the terms of a counteroffer will prevail over the terms of the original offer if it is accepted.

Contracts should be signed and dated by the parties to indicate acceptance.

Other requirements: 

Dispute resolution:  Consider requiring disputes to be subject to mediation. Mediation is where you both talk to a facilitator whose job it is to help you both come to an agreement as to how to resolve the dispute. There are professio0nal groups that do this all over town.

Written Contracts:  Oral contracts can be binding, but also hard to prove who said what, advice – whenever possible, get the terms of your agreements in writing. Valid agreements may be implied from the parties’ actions.

Basic Structure to a Contract – The Who, What, When, Where of Contracts

Who are the parties and what do they bring to the deal?

What is the project to accomplish?

When and how will it end? (its term, conditions, and other limitations)

How do the parties get what they want?  (Stuff or money or actions)

What subsidiary issues are parts of this deal?  For example: what is not part of the project but could be? (Derivative works like cartoons, lunch boxes and t-shirts)

In addition, the “Boilerplate” clauses (common to most agreements), including an alternative dispute resolution clause, which court to be used, any automatic penalties.  Can you change the agreement orally or does it have to me in writing, etc.

Types of CONTRACTS you as an artist will see

Work for Hire Contracts:  (Work for Hire is a legally operative term.)

Unless otherwise agreed by the parties, all production by an employee in the scope of employment, during regular hours, and using the employer’s time or materials belongs to the employer. This includes any intellectual property rights related to the product, including copyrights and patents.  This applies to contracts where a party provides services under a work for hire agreement as an independent contractor. This type of agreement is very common in industries and is presumed in film production agreements.

Work for hire contracts are only legally valid for certain types of work, such as contributions to collective works, specially ordered or commissioned works, and collaborations. These agreements must be in writing and signed by the parties before the start of work. Works for hire contracts also commonly include an explicit grant of author’s copyright interests to the hiring party. The employer assumes copyright interest and the author retains no rights. Once aware of the effect, artists typically consider avoiding “work for hire” agreements.

Independent contractor agreements:

Not all independent contractor agreements are work for hire contracts. Some employment contracts for services enable the author to retain some or all of their rights to their work. Working as an independent contractor does not automatically mean that the professional is transferring rights to their work – the presumption is that they are not. It is helpful to have a clear understanding in the contract about who can do what with the final product.  If parties do not sort out ownership rights issues in advance, the courts have to determine whether a party hired to perform services was an employee or an independent contractor.

Courts have struggled to establish legal guidelines to determine the status of a party providing services. The difference is important because it affects the control of the product as well as the service provider’s tax liability. As an independent contractor, you will have to pay more taxes, including self-employment and social security taxes. You will get a 1099 form in the mail at the end of the year and not a W-4.

Independent contractor agreements should include such factors as where the work is to be performed, whose tools and materials are to be used, the level of the hiring party’s supervision and control over the performance of the work, the method of payment, and the tax treatment of the worker by the hiring party.

Licensing and Royalty agreements:

Licenses are grants of rights to use work given by the owner of the work. In exchange for these rights, the licensee pays a fee to the licensor.

Royalties are licenses based on the amount of money generated by sales of specific products incorporating the work. Licenses are very common in all areas of intellectual property law and it is very important for both licensors and licensees of material to understand the concepts. The licensor might be advised to convey the minimum rights needed by the licensee to meet their needs. Exclusive transfers of copyright interests must be in writing and all licensing contracts involving copyrights should be explicit about each party’s rights and responsibilities regarding the use of the material.  Licensing contracts may include the following:

Geographic limitations on where and how the property can be used.

Specific products or media in which the property can be used.

Limitations on the term or length of time of the use.

Limitations on the number or specific type of products to be created.

Options to renew the agreement. These options may be tied to specific number of products sold or other performance-based criteria such as royalties paid.

Whether or not the license is exclusive or non-exclusive.

Royalty rates: The percentage of the income to be paid to the licensor.  Some rates increase with better sales (escalator clauses).

Advances on expected income from the exploitation of the license by the licensee.

Option on next work:

Option contracts are used as a means of bargaining for the future rights to use a property not yet in existence. In this agreement the owner conveys the right, typically the exclusive right, to a party for future use or development of this or a future property, thereby entitling the buyer to the first right to consider use of the property. Be careful about this one.  An option agreement is often part of a larger agreement entitling the buyer to a continued relationship with the artist.

Consignment Agreements:

When an artist enters into a contract with a gallery, or any exhibition space where their work is offered for sale, and the proprietor will sell the work for the artist, the artist is “consigning” their work with the exhibitor. Consignment agreements commonly include the following:

Whether or not the agreement is exclusive within a specific geographic area, time frame.

A detailed inventory list of all works consigned, including their medium, dimensions, and minimum selling price for each work.

Commission fee percentages based on the agreed selling price of the works consigned. Commonly, the split between the exhibitor and artist is 50% / 50%.

Payment terms and deadlines. Under the Oregon consignment law, the proceeds of a sale are due to the artist within thirty days of receipt by the gallery.

A breakdown of which party pays for items related to the exhibition, such as postcards, printing, mailing, advertising, opening parties, framing, installation, and shipping.

Insurance. Which party is responsible for paying for damage or theft while the works are in transit to and from the exhibition space? Does the gallery have insurance while the works are in their possession?

Copyright usage and credits. How is the artist to be credited on public uses of the artwork’s images and what rights, if any, does the exhibitor have for using the images.

In Oregon, consignments of artwork is covered in Oregon Revised Statutes (ORS) 359.200 et seq. Written contracts are required for all consignments, but the absence of something written won’t help someone avoid the consignment law, the laws apply whether or not the artist has a written contract, the work is still yours, the gallery still must pay within 30 days, the gallery must still tell you who bought the work. If you do not get a written agreement, you should write a letter asking for one. There is a fine for the gallery withholding the name of any purchaser of the work. Although the laws do not apply in other states, artists can agree to apply the Oregon law in their contracts.

Model releases / location releases — Permissions:

Model releases, or permissions to use another person’s image for your artistic purposes, are very important to photographers, illustrators, filmmakers and anyone using the services of such professionals. It may also be necessary to obtain a release to use images of locations and buildings, and certainly, it is necessary to use artwork belonging to others on film. These releases typically include the basic contract elements listed above, including consideration in exchange for whatever specific usage rights are granted. Such releases often detail how the image or location will be used.  Permissions can be very open to anticipate any use for the work that might present itself.  For example, permission (license) could be these words, signed and written on a napkin:  “perpetual rights to use images of the model or location in all media now known or hereafter developed.”

CONTRACT TIPS:

Oral agreements can be binding but they are hard to enforce because people remember different things about the agreement. Although not everyone has a contract for you to read and sign, you can help get the important terms in writing with a “confirming memo,” a “thank you” note, or letter in which you describe the terms of the agreement as you understand them, inviting the other party to respond and develop a written record of the agreement.

Read your agreements carefully.

Get the terms of your agreements in writing. If a party insists on a verbal agreement, send them a letter detailing your understanding of the agreement, including the terms you consider important to understanding the agreement this creates a written contract and clarifies the expectations of each party.

Do not sign any contract without completely understanding it. Question terms you do not understand. Sections you do not agree with should be changed or deleted. There is no shame in crossing out parts of a contract you do not want or want to change.

Be careful of signing “exclusive” agreements and know what the inclusion of this term in your contracts may entail. If you are tied to one party for all of your income make sure you are getting enough to make this work for you.

The agreement should address when or how the agreement will be finished or terminated. What happens is you do not complete the project? Who owns it?

Work for Hire agreements will shift ownership of copyright from you to them, automatic is your work is specially commissioned to complete another work. Illustrators beware and be careful – sometimes the market for illustrations and their derivative work is more valuable than the book.

Some On Line Resources

www.copyright.gov      Copyright Office website: forms and instructions .PDF format.

www.uspto.gov Patent & Trademark Office website:  and searchable databases.

www.filinginoregon.com Oregon Secretary of State Office for corporation & business info

www.fairuse.stanford.edu Site for fair use information.

www.gag.org The Graphic Artists Guild web site.

 

NOTE: The information in this, and any other article on this website, is for information, discussion and academic purposes only and should not be relied on as legal advice.  Seek legal and financial counsel in your jurisdiction before acting on any ideas presented in this website.  This article does not create an attorney-client relationship. 

www.nolo.com NOLO is a legal self-help book publisher and a reliable source for information