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Entrepreneur’s Notebook

Just a couple of years ago, the Internet was likened to the Wild West, an open frontier to be settled by pioneers and cowboys. In the last year, however, the Law has come to town.

The World Wide Web offers great opportunity for today’s entrepreneur, a place where one can sell content, or anything else, with very little in the way of overhead. But the ease and accessibility of the Net can lead to misconceptions with dire consequences. One common misconception is that images found on the Internet are “in the public domain.”

In April, a federal judge in San Diego awarded $3.7 million to Playboy Enterprises in a copyright case against a Web-site operator, the latest and largest judgment obtained by a company that has been earning a reputation for aggressively protecting its trademark and copyright interests on the Net. In December of last year, a federal judge in Texas awarded Playboy $439,000 plus attorneys’ fees against another Web-site operator accused of selling access to Playboy’s images.

Many people do not realize that the Copyright Act protects a photograph, painting, essay, story, song, screenplay, computer program, or any other “original work of authorship” as soon as the work is created. A photograph, for instance, is immediately protected whether or not the photographer has registered her photograph with the Copyright Office, and whether or not the word “Copyright” or the symbol & #352; appears on or near the work.

Most Web browsers today allow easy and immediate copying of any image that appears while surfing the Web. Many of those images have been copied from other Web sites, many have been “scanned” from books or magazines, and some even appear on the photographer’s own Web page.

One popular, and improper, activity by users of the many newsgroups titled “alt.binaries.pictures ” or “alt.fan ” is scanning photographs from magazines and posting them to the Internet. Just because an image appears on the Net, however, doesn’t mean it’s there to be copied, any more than a magazine could publish, for free, a photograph it had copied from a competing magazine.

The Copyright Act gives an author certain exclusive rights in a work, including the exclusive rights to reproduce, distribute, display, publish, sell, and market the work. Copy a picture in digital form and you’re still copying, put a picture on your Web site and you’re displaying the work. A Web-site operator who has done either of these things has violated the act by infringing the copyright, whether or not he is selling access to the works, like in the Playboy cases, whether or not he makes a profit from the work, whether or not he knows the image is copyrighted, and whether or not he intends to violate the act. A photographer who has invested time and money in producing and marketing her images is not likely to be happy to see the image on your Web page without permission.

A photographer who’s in the mood to sue could wreak havoc on a Web-site operator who infringes her copyrights. For instance, she could disrupt the Web-site operator’s business.

In the San Diego Playboy case, federal marshals, accompanied by attorneys from Playboy, conducted a surprise raid on the defendant’s office and copied images stored on the defendant’s computers. After duplicates were made, the images were erased from the defendant’s computers. In a different scenario, a copyright owner could theoretically seize and hold the very computers on which the defendant’s files are stored.

Next, the copyright owner can recover any actual damages she has suffered, and any profits of the infringer that are attributable to the infringement. The copyright owner only needs to present evidence of the infringer’s gross revenue; it then becomes the infringer’s duty to present evidence of deductible expenses and profit attributable to other factors.

Alternatively, and more commonly, the copyright owner can elect instead to recover “statutory damages,” an award that is not related either to actual damages or to profit, in the amount of not less than $500 or more than $20,000, per non-willful infringement. (If the infringement is “willful,” the court can award up to $100,000 per infringement.)

In the Playboy case last month, the court awarded the bare minimum, $500 per image, after finding 7,475 photographs appearing on the defendant’s Web site and CD-ROMs. In the earlier Playboy case from late last year, the court awarded $5,000 per image.

Finally, the court can award costs and attorneys’ fees to the prevailing party. This means that in the right case, the Web-site operator will pay the costs of the copyright owner’s actions to protect her copyright.

The statute of limitations on a copyright action is three years. Today’s entrepreneur may not seem to be a likely target, but with a little luck and a lot of work, he could be successful enough in a couple of years to attain the dubious status of a deep pocket.

If you own or operate a Web site, be certain that you have a right to use the images and other content appearing on it. Make it yourself, or license it from a photographer you know, or from one of the many image banks that advertise their products on the Web.

When you put a page up on the Web, it will hopefully be seen by millions of people (that’s why we call it the “World Wide Web”). Make sure you have the right to show those people what they’re seeing.

Jeremy Sugerman is a partner in the San Francisco law firm of Gordon-Creed, Kelley, Holl & Sugerman LLP. Among other things, he represents photographers protecting their copyrights, and business owners protecting themselves.

Entrepreneur’s Notebook is a regular column contributed by EC2, The Annenberg Incubator Project, a center for multimedia and electronic communications at the University of Southern California. Contact James Klein at (213) 743-1941 with feedback and topic suggestions.

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