Copyright Liability Could Cost You and Your Business

Businesses can unknowingly infringe others’ copyrights in all kinds of ways. It’s important for copyright holders to know their rights. It’s also important for those using copyrighted content to be aware of common pitfalls and risks to avoid legal headaches and unexpected costs.

Understanding Copyright Risks and Protections

Many businesses frequently encounter copyright issues. As part of their regular business, some create copyrighted works like music, software, video content or artwork. Some buy or sell licenses for the use of those works. These organizations should understand their rights and how to enforce them. They should understand their obligations when using others’ content.

On the other hand, for many businesses, copyright risks are not even on their minds. But copyright liability can be a trap for the unwary. Having never considered copyright risks, a company can receive a demand letter or a lawsuit claiming copyright infringement. Businesses may be subject to significant damages—sometimes far more than the cost of obtaining the necessary licenses or permissions at the outset.

How might your business be affected by copyright risks, and how can you limit the threat?

Music Usage

If you own a gym, restaurant, bar, brewery, store, hotel, salon, or other business, you may well want to play music for your customers to enjoy in the background. Perhaps you'd even like to host a live band or DJ, or a karaoke night. Perhaps you want to incorporate music into a promotional video or social media post.

We’re all familiar with hearing music everywhere we go, but that doesn’t mean you’re free to use it for free. You can’t just play music from Spotify, Apple Music, or another streaming service. You have permission to play that music only for your personal use. Playing it for your customers risks liability for copyright infringement. Most businesses are required to obtain a license.

The price of your license will depend on the size of your space, the way you are using the music, and the purpose for which you are using it. You risk copyright liability if you get the wrong license or if your use goes beyond the bounds of the license.

The licensing organizations work diligently to enforce their rights, often making unannounced visits to businesses and closely monitoring online activity to ensure compliance.

Using Written Content

If you produce written content for your business—such as articles, marketing materials or website content, or words to be displayed or spoken in advertising—you also need to take care. You might get inspiration from other sources, or you might even use short quotes with attribution. However, you cannot use significant portions of another person’s writing, even if you give credit. There is a narrow exception for "fair use," but the requirements for fair use are complex and relying on that exception carries risk. If in doubt, consider obtaining written permission from the content creator.

Software Usage

Copyright liability can arise if you use software without a license or if you use it beyond the bounds of your license (such as using a personal license for your business). Software companies have sophisticated ways of detecting unlicensed use, including mechanisms that automatically send a signal to the company when the software is used. Software publishers may then take action, or a third party could take action on their behalf.

Computer repair shops and other businesses that maintain or re-sell computers may be at a particular risk. They might inadvertently use—or be seen to be using—copyrighted content. Your lack of knowledge generally will not protect you.

Using Photographs and Other Artwork

Before you use someone else’s photograph, drawing, painting, or other artwork—on your website, in your marketing materials, or in your physical space—you need to determine if you have permission. Even if someone takes a picture of you or your business, this does not necessarily mean you have permission. You may need to get a paid license from the creator or the current owner.

This includes stock photos. Some online images are available under a free license, but many stock photos require a paid license from organizations like Getty Images, Shutterstock, Adobe, or the Associated Press. The organizations holding the copyrights or third-party organizations monitor the use of the images and enforce the owners’ trademark rights.

Using Video Content

Many of the ways your business uses video content may also expose it to the risk of copyright liability. Showing a movie, television show, or other video publicly—in person or online—generally requires permission from the creator or copyright holder. Downloading content, including via peer-to-peer networks, may also expose you to liability. Copyright owners frequently monitor for use of their content, as do third parties. As in other contexts, obtaining explicit permission is key.

Asserting and Protecting Your Rights 

If your business creates any of the content discussed above, it may well have rights as a copyright owner—rights you want to protect. Creators should understand how and when to register their works. You must register before filing a lawsuit for infringement of that copyright, even if the infringement occurred before registration. A failure to register early can also limit the types of damages you can recover. It is also important to understand the process of filing a lawsuit for copyright infringement. There are many considerations, including who the lawsuit can be brought against, where it can be brought, and the damages you may be able to recover.

Whether your business is creating original content or using content created by others, understanding copyright law is essential. Smith Anderson’s Intellectual Property team offers practical guidance to help you stay compliant, avoid costly missteps, and protect the value of your creative assets. For questions or support, reach out to Ed Roche or your regular Smith Anderson attorney.