Making your intangibles, tangible. Part 1: Copyrights.
by Peter Smith
In this four part series, we’re discussing how to increase the value of your company by better quantifying and protecting your company’s intellectual property rights. An investor or prospective buyer (or anyone else interested in your company’s true value) will inevitably ask a simple question: what’s to stop a third party from simply copying what you do? You want to have a strong answer about intellectual property right protections, and your first resort may be copyright law.
Copyrights are some of the most valuable and often overlooked commodities for a small business. Functioning as a protective shield against unlawful copying and distribution of original content, a copyright can prove to be a powerful tool in maximizing the value of your products, services, and business. The kicker is that registering a copyright with the U.S. Copyright Office is an inexpensive $35. But before rushing to the U.S. Copyright Office to register every note, photograph, or design you own, you’ll need to know whether something is copyrightable (subject to copyright protection) in the first place.
What is Copyrightable?
Obtaining a copyright may sound complex but in reality it is a simple process. Understanding what is actually copyrightable is a good first step. According to U.S. copyright law, copyrightable subject matter is “a work of authorship fixed in a tangible medium.” This definition can be broken into three basic requirements: (1) a work; (2) authorship; and (3) fixed.
A “work” is defined fairly broadly. A work may be a painting, an original essay, a sculpture, source code for a computer program, a song, a speech, a video recording, etc. The key is that the work must be original and contain some level of creativity. The best way to conceptualize whether a work meets the standard of originality and creativity is the “idea/expression dichotomy.” This is to say, ideas are generally not copyrightable, but an expression of an idea is.
This concept becomes complicated when we look at things like manuals, employee handbooks, and other compilations. For example, a collection of newspaper articles taken from the Seattle Times, organized in chronological order, may not be copyrightable because it lacks originality – the organization is standard and functional. However, if the compilation is made up of newspaper articles taken from the Seattle Times, organized in a way that tells the story of how green energy companies have grown and transformed in the city, you probably have copyrightable material. The difference is the creativity, inventiveness, and overall ingenuity of the content and how it is expressed. Some notable exceptions to copyrightable content include: facts, ideas, and discoveries; characters, themes, and abstracted ideas (generally in literary works); and functional works such as systems, processes, and methods (which can be protected under patent law, in a later post).
The second requirement is “authorship.” An author is someone who actually creates the work, who translates an idea into a fixed tangible medium, or who has the decision-making authority or control over the expression. Deciding who is an author is generally a simple task, but there are some caveats. For instance, content is generally not considered “authored” if a computer or robot produces it. This is not to say that computer-generated content that comes from human-made computer programs is not copyrightable. The key point here is that the subject matter, or resulting content, needs to be a human creation. For example, a webpage can be considered a copyrightable work because the coding, positioning, and design of the webpage are all human creations, even though the actual execution of the page is done through computers.
The last requirement is “fixation.” This concept has been a little tricky since the advent of the Internet, but the idea remains the same. The purpose of fixation is that the subject matter can be observed and the ability to observe the content is what makes it fixed in a “tangible medium.” A tangible medium can be anything from a painting canvas to a television screen or radio broadcast. If the content is merely transitory or disappears after a short amount of time, it is likely not considered “fixed” and is thus ineligible for copyright protection. That being said, websites and digital content present a problem because they are technically temporary displays and transmissions. In general, a website will still meet this requirement so long as it is able to be observed for a period of time because it is hosted on a server, has a dedicated domain name, and a tangible source (i.e. a file or source code). Again, the main concern is not how the content is observed, but that it is able to be observed for some period of time.
I have a copyrightable work, what next?
Once you have decided that your content is a work of authorship, fixed in a tangible medium, it is time to register it! Of course, as many people correctly state, copyright protections automatically vest the moment the work is created and without registration , but registering your copyrights is advantageous.
First of all, as is the point of this post, registrations are tangible manifestations of your intellectual property. Prospective buyers can literally hold a registration in their hand.
Second, registering your content gives an added layer of protection to your content and provides a stronger basis for litigation should your work be infringed. Registered copyrights are filed in the U.S. Copyright Office allowing you to have a documented record of ownership and helping you protect against unauthorized uses of your work. Additionally, registering your copyrights allows you to initiate an infringement action in federal courts and recover statutory damages totaling anywhere from $750 to $30,000 per work. Without registration you’re limited to proving actual damages from copyright infringements. The actual, monetary damages of unauthorized intellectual property rights are difficult to prove. Thus, the statutory damages can be extremely appealing.
Registration can be done by mail or online at www.copyright.gov and only costs $35. In order to complete your registration, you must include: a completed application (sent either by mail or via the electronic filing system); a copy of the work (either an electronic version or a qualified copy); and the filing fee. Sound recordings, audiovisual works, literary works, and visual works can all be filed online, but keep in mind that the U.S. Copyright office will retain whatever content you send in to keep on file in the Library of Congress.
Despite the above advice, some of you reading this will still choose not to register copyrightable works. For those readers, it is important to put any consumer on notice of your inherent copyright protections. This can be done by placing a “©” on your content or even writing out “Copyright” or “Copr.” To indicate that the work is original content owned by someone (whether an individual or company).
Making your commodities more valuable through registered copyrights is an inexpensive tool that all businesses, small or large, can benefit from!
The article provided above is for general information purposes only and should not be relied on as specific legal advice. This article does not form an attorney-client relationship. If you have any questions about this article, please feel free to contact Peter J. Smith at firstname.lastname@example.org
This article was authored by guest blogger Ken Strocsher, an upcoming 3L at Seattle University School of Law and summer associate at the Apex Law Group.
June 29, 2020