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Copyright Consequences and Potential Legal Exposure For Theft Of Online Content - Online Stealing
I wanted to write about a situation that has actually happened to my company as I believe the situation holds some important lessons for businesses that sell print content online as well as those who may be tempted to use the material created by others either without authorization or beyond the scope of a license.
My company has been in the business of selling high end legal documents for around 9 years. Each and every document that we well was originally created by me while I was practicing law. I spent hundreds of hours creating these documents to make them both unique and of the highest quality. I took great pains to make the documents original works of authorship. I went through a long process of study for each document. I did a lot of reading and study. I would read numerous agreements on the topic, create an outline, and then sit down independent of any other document and started typing as if I was creating an agreement, from scratch, without the benefit of a form to start with.
I did this for over 250 high quality, full length, technology documents for web developers, software programmers and others in the IT industry.
I then went to work packaging the documents that I created and have had a very successful business marketing these document packages. My marketing niche was to sell entire packages of 80-250 documents for the price that someone would pay for about a quarter hour of attorney time.
I later expanded into incorporation, bylaws, corporate kits, real estate leasing, trusts and wills, confidentiality forms, and corporate resolutions and continue to work on new product lines. All of my documents are originally created and represent hours and hours of study and work.
Of course the next step was to market these packages in the most cost effective manner. This has changed over time as the Internet environment has changed significantly in the 9 years that has passed since I originated this business. One of the marketing methods that I continue to use is maintaining exposure in what remains of the spider search engines. Those of you who use this marketing tool are familiar with the process of SEO; optimizing the contents of your pages, comparing keyword prominence to other pages that rank well under that keyword, etc.
As I was optimizing for one of my more obscure agreements for Google, I ran across some material that looked suspiciously similar to my packaged products. In fact, even the name of the package was the same. The only difference was that they had provided the opportunity to purchase individual documents as well as the entire package. On closer examination, I discovered that the documents in the package were my documents, being sold without modification; including some minor typos and unique wording that I use in my documents. The documents are being sold by a company that holds themselves out as being The Internet Leader In Downloadable Legal Documents.
Clearly, this type of direct copying is the most egregious of copyright violations. Even the hidden information in the documents were intact, just how I created them in the first place. The only thing that was missing from these documents was my copyright notice that was contained in a a footer in each of these documents. In total, there appears to be approximately 100 of my documents for sale on this web site.
This company is in a heap of trouble and the consequences of it will likely take down their business. As a retired lawyer, I knew exactly the steps to take which may be instructive to others faced with similar situations. I will get to that in a later article, but first let me describe a little bit about what this company may be facing.
I am clearly the owner of the copyright on these originally created documents. As a side note, there is a common misconception that you need to registered your copyright in order to maintain protection. In reality, all original works of authorship are protected from the time of creation. There are clear benefit to registering your copyrighted material that I cover in other articles. But the bottom line is that registration is not a prerequisite to receiving the protection of the Copyright laws.
Additionally, the other company has clearly violated my rights as the copyright owner. This would all need to be proved in court of course, but it is a fairly easy case.
As for penalties, this company would be liable to me for all profits attributable to these documents. I could also elect to take statutory damages instead of having to put on proof of actual damages. These statutory damages would apply even if they greatly exceeds their actual sales revenues from selling my documents. Even for a non intentional violation, the Copyright Act sets damages as $750-$15,000 per item. If the violation was intentional, statutory damages can be as high as $150,000 per item.
I am assuming there were 100 documents involved to keep it simple. This means that the range of damages would be $75,000 to $1,500,000; even if the infringement was not intentional. Direct copying is fairly strong evidence that the violation was intentional. For an intentional violation, the statutory damages for this violation would be $15,000,000.
In additions to statutory damages, the Copyright Act also permits me to collect attorney fees for pursuing the case.
As you can see, the Copyright Act penalties create a very strong incentive to avoid stealing the work of someone else online. These penalties could be applicable even if there is a valid license is in place permitting the party to use the documents with certain limitations but those limitations are exceeded. A good example would be the Articles that are submitted to Article Publishing Sites. Many of the reprint licenses state that the material can be freely reprinted provided that the author box is included. If the article is republished without the author box, the use would exceed the license that was granted to use the documents. This would be as much of a Copyright Infringement as the situation I described above and could expose the violator to similar damages.
So the lesson here is:
For the user of online material, when doing business online, abide by the Copyright Laws. The potential penalties are great and could completely destroy the business you have created. Realize that material is protected even if you obtain it for free online and even if it does not bear a copyright notice.
For the creator of online content, be vigilant. Actively look for people violating your copyright. Search for your unique content. When you find someone infringing your copyright, don't let it slide. That is your hard work and it is stealing.
Look for my next article covering the steps to take when you find someone has violated your copyright.
Software Piracy, Fair Use Law, and Copyright Infringement
As the multi-billion dollar software industry continues to become more and more financially lucrative, some of the more unethical entrepreneurs in America are attempting to get in on the moneymaking action by distributing pirated software. Often carried out online, software piracy can cost the industry millions of dollars in lost revenue, and the offense can carry hefty punitive fines and prison sentences.
According to reports from the United States Department of Justice Computer Crime and Intellectual Property Section (http://www.cybercrime.gov/), Operation FastLink, a federal program called "the largest global enforcement action ever undertaken against online piracy," since 2004 has been responsible for confiscating over $50 million worth of pirated media from distributors. Additionally, the USDJ's Intellectual Property Task Force recently released its 2006 progress report, highlighting the achievements of the organization in exceeding the goals put forth in its 2004 report. The federal government is taking decisive steps to combat software piracy and piracy of other media such as movies and music, and games, and the consequences for dealing in pirated merchandise are becoming increasingly heavy.
The term software piracy is used in reference to the copying and selling for profit of copyrighted software without permission of the copyright holder. Distribution of pirated software is also in violation of copyright law in the U.S., even if no profit is made, with the exception of copies made for educational purposes and other circumstances that fall under U.S. fair use laws. Under current U.S. law, fair use allows for the reproduction of a particular work for purposes such as "criticism, comment, news reporting, teaching, scholarship, and research." Four factors specified in sections 107 through 118 of the Copyright Act must be met when claiming fair use:
1. The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes
2. The nature of the copyrighted work
3. Amount and substantiality of the portion used in relation to the copyrighted work as a whole
4. The effect of the use upon the potential market for or value of the copyrighted work
Fair use does not apply, of course, to the distribution or sale of illegally copied software or the resale of original software.
In June 2006, 37-year-old Danny Ferrer pleaded guilty to one count of conspiracy and one count of criminal copyright infringement for selling pirated software online. Ferrer ran what was one of the largest online distribution services of illegal software in the U.S., and is responsible for losses up to $20 million for the software industry. He operated www.BUYUSA.com, selling reproductions of copyrighted software at low prices, from 2002 until 2005, when the Federal Bureau of Investigation shut down the site. He is currently awaiting his August 25, 2006 sentencing, at which time he could be faced with a maximum of 10 years of prison time and fines up to $500,000. Federal investigators hope this and similar cases will serve as a warning to those who attempt to profit from software piracy.
Copyright Protection Of Databases
Copyright law is covered by the Copyright Act of 1976, codified at 17 USC s 101 et seq. Some pertinent sections include, Sections 101, 102 and 103. Section 101 defines "compilation" as: "A work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship". Section 102(b) provides: "In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work." Section 103 limits the protection of a compilation to the author's original contributions and not the facts or information conveyed.
Databases are collections of facts. Facts themselves are not granted copyright protection, but if they are compiled in an original manner, the compilation is protected. A minimal degree of creativity in putting together the facts in the compilation, is required. This creativity can be represented by the facts chosen, the order in which they are placed and the arrangement chosen to serve a particular purpose (allowing the reader to effectively use the facts). Even if there is a valid copyright of the compilation of the facts (which themselves cannot be copyrighted), a subsequent compiler can use the facts contained in another's compilation to use in a competing work, as long as the selection and arrangement of the competing work is not the same. The reason is that the facts do not become original through association (by being included in the compilation) and therefore, the copyright is limited to the particular selection and arrangement (the author's contribution). To allow the facts such protection would grant a monopoly in public domain materials.
In order for a database / compilation to have copyright protection, there must be a collection and assembly of pre-existing material, facts, or data; the selection, coordination, or arrangement of those materials; and the creation by virtue of the particular selection, coordination, or arrangement, of an "original" work of authorship. Feist Publications, Inc. v Rural Telephone Service Co. 499 US 340 (1991). The principle focus should be on whether the selection, coordination, and arrangement are sufficiently original to merit protection. It has to be made independently without copying and it has to show a minimal level of creativity. Copyright rewards originality, not effort.
Bottom line: A database copyright at most will only protect the author's original contributions and not the facts or information conveyed even if the facts or information were arrived at only through the industriousness of someone else. See Miller v. Universal City Studios, Inc., 650 F2d, at 1369-1370.