Copyright — how does it affect my business?

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A person who infringes copyright can be liable to compensate the copyright owner for its loss, or to account to the owner for the profit they have made from the wrongful use of the material.

How is copyright protection obtained?

The rights covered by copyright are automatically created as soon as the relevant work is created. There is no registration system for copyright.

Copyright is owned independently of a physical item in which the right is embodied or reproduced. For example, if you buy a book (the physical item) you are not buying the copyright in the literary work. As the owner of the book, your rights do not extend beyond reading the book (or perhaps using it as a door stop.)

Do you need to include a copyright notice on copyright material?

Although copyright arises automatically, it is a good idea to put a copyright notice on the important material that your business creates. This is usually in the form of a © with the year of creation and the name of the copyright owner. Although this is not strictly necessary for copyright protection to be obtained, it may:

• deter potential copyright infringers and
• might mean that your own employees treat the material more carefully, and
• make it easier to take legal action in some overseas countries if a copyright notice is included.

Who owns copyright? Employers, employees and consultants

Copyright is usually owned by the creator of the relevant work. Probably the most important exception to this is where material is created by an employee in the course of their employment. In that case, copyright will usually be owned by the employer. However, it is prudent to include a provision about copyright ownership in employment contracts of key employees.

Although a business will usually own copyright in material created by employees in the course of their employment, this is not the case if the material is created by independent consultants, even if the business has paid for the material which is being created.

So if the material is created by independent consultants, then it is absolutely crucial to obtain a formal assignment of copyright from the consultant to the organisation. Otherwise:

• the best that an organisation has is a licence to use the material that is being created; and
• it may be impossible for the organisation to stop the consultant from reusing the material or even from selling it to others.

It is far easier to deal with this matter at the time a consultant is engaged, than after the engagement is completed and the consultant has been paid.

Does copyright infringement matter any more?

Even though digital material can be processed in an infinite variety of ways and can be reproduced rapidly, at little cost and without loss of quality, the fact that "everybody is copying things all the time" doesn't change the law.

It would be a serious mistake to think that widespread consumer abuse means that copyright infringement is never redressed. Virtually every day there are substantial damages awarded for copyright infringement. From a strategic perspective, a claim for copyright infringement can often be an important addition to a claim for misuse of trade secrets, passing off or misleading and deceptive conduct.

Indeed, Cleardocs has successfully protected its copyright several times — and received substantial amounts of money in compensation.

Time for a copyright audit at your organisation?

It may be time for a copyright audit at your organisation. You should know:

• What copyright material your organisation owns.
• What copyright material it uses but does not own.

In this age of the "knowledge economy" or "information economy" your organisation's intangible assets, such as copyright material, are assuming greater importance and greater value. It is crucial that your business knows what copyright material it owns, how it may exploit it or commercialize it and what value it should have in the balance sheet.

Practical ways to protect you rights.

Some final hints:

• Always think about copyright "upfront". The law allows agreement to be reached about copyright ownership before the copyright material is created.
• Keep a paper trail of how material is created.
• Use copyright notices on material you create.
• Strictly supervise use of copyright material by others (including employees).
• Exercise care in allowing others to see, use or reproduce your copyright material.
• Know what you own.
• When you use licensed material owned by others, ensure compliance with the terms of the licence.

Questions

If you have any questions about this article, or intellectual property generally, then please call the Maddocks Intellectual Property and Information Technology team in Melbourne on 03 9288 0555.