Small Business Copyrights: You Must Protect Them!

by Steven A. Marderosian

Entrepreneurs and small businesses run the greatest risk of losing copyright protections on their work product because they often fail to protect them. Particularly in the current market, many businesses feel that the cost of an attorney to draft proper documentation (e.g., agreements for licensing, joint works, works made for hire) does not represent a return on investment. This thinking is penny wise but pound foolish; not protecting your intellectual property makes sense only if you believe it has no value.

Copyright protection applies to any originally authored work that is set forth in a tangible medium (including paper, electronic files, Web pages) with content not already in the public domain. While copyright protection attaches automatically upon completion of a work, as a matter of good practice this is not enough. Every small business should register their copyrights for three reasons.

First, registration alone may convince an infringer to cease and desist upon notice.

Second, registration ensures standing to sue for infringement.

Third, registration enables a small business to recover statutory damages up to $150,000 per work plus legal costs and attorney fees, which is particularly important because actual damages and lost profits are always hard to prove.

Beyond registration, CC&M helps its clients resolve the issue of “authorship,” which can be difficult to determine because more than one entity often contributes to a work and each may transfer its rights to third parties. Moreover, joint authors need to plan early and express in writing their intentions to create a joint work.

CC&M clients who are employers might assume that they own the rights to anything their employee creates. This is often incorrect. Works made for hire, where the principal becomes the initial owner of the final work, are only those specified by statute that are prepared either by an employee within the scope of employment or by a third party commissioned in writing. The bottom line is that maintaining rights in an original creative work is worth the front-end costs.