Copyright Law for Ecommerce Merchants

LegalThe Internet makes copying photographs, artwork, and words easy, since a relatively unsophisticated user can just browse the web saving or copying nearly anything that suits his fancy. As an e-business owner you’ll want to both protect your photographs and, conversely, ensure that your employees are not taking protected work of others. After all, a copyright violation could cost thousands of dollars in legal fees, time, forced subscription fees, and potential fines.

U.S. copyright protection extends to all forms of “expression” including software, written papers, charts, digital files, music, video, and presentations. This protection begins the moment a work is “fixed in a tangible medium of expression,” and copyrights are federally enforced. Generally, ideas, short phrases, facts, slogans, and useful articles are not copyright protected, but most everything else is.

The owner of a copyright protected work enjoys six exclusive rights:

  1. The right to reproduce the work.
  2. The right to prepare derivative works based on the original.
  3. The right to distribute copies to the public.
  4. The right to perform the work publicly.
  5. The right to display the work publicly.
  6. The rights to copy, publicly distribute, and prepare derivative works that are digital audio sound recordings.

The owner of the copyright protected material can control who copies the work, how much will be charged for copies, and whether or not to allow the public to use or make derivative works of the original.

Many e-business owners and their employees operate under the false belief that if they find something on the Internet, they have a right to use it for free. There is no distinction as to whether the website is a commercial or non-commercial website, the content on the website still enjoys copyright protection and permission may be needed to use the content.

Imagine an online toy store selling action figures. The store’s owner hires a professional photographer to take dozens of compelling product shots of the action figures, and then posts those images online. A competitor, who sells the same brand of action figures, see the photos, copies them, and uploads them to her site. This action is theft, and is punishable under copyright law.

Protect Your Site

Relatively inexpensive software is available that allows a copyright owner to search the Internet and see if his content is being used illegally by another website. Additionally, many websites put digital tags on their pictures which allow them to track the use of the image. And sometimes, just placing a copyright symbol and date on the work is enough.

The Penalties for Violating Copyright Law

The penalties for violating copyright law can be severe with the following civil infringement damages available:

  1. Actual damages (the amount you would have to pay to license the material from the copyright owner).
  2. Statutory damages of $750-$30,000 per work.
  3. If the violation was willful—up to $150,000 per work.
  4. At the court’s discretion, attorney fees.
  5. Embarrassment.

What is Allowed Under the Law

It is permissible to copy a link to a website and email the link to someone without violating copyright law as you are not copying anything other than the Universal Resource Locator (“URL”). In some instances it may also be permissible to use portions or all of the copyright material under a doctrine called “fair use”. However, keep in mind that in order to utilize the defense of fair use you must first admit to using the copyright protected work and thus if your defense of fair use fails, your case is lost.

Fair use of a copyrighted work means that one can copy or post that work for purposes such as criticism, comment, news reporting, teaching, scholarship or research. It should be noted that this list of purposes is not exclusive, but any fair use analysis will need to look at four factors. These are (1) the purpose and character of the use, (2) the type of work copied, (3) the amount and substantiality of the portion copied as compared to the original work, and (4) the effect of the copying on the market for the copyrighted work. These factors are all considered in any given case and no formula exists for weighing them.

Ultimately in close cases it can come down to a judgment call. In all cases where there is any degree of doubt, it is strongly recommended that you not engage in any copying and seek legal advice before doing so. It is better to purchase photographs or take your own than copying those images from the web. Some businesses may also sign contracts with various organizations which allow them to copy protected work or perhaps a manufacturer can grant permission to use their product images on an ecommerce site. In instances where a contract or agreement exits, terms should be followed exactly.

In today’s digital age, e-business owners or their employees may intentionally or unintentionally violate the copyright of another with more ease. This may leave the organization vicariously liable for the employee’s actions and cost a great deal of time and money.

Peter LaSorsa
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