Urban Legends of Copyright Law

Do you believe that if you just mail yourself a copy of the character you created you will receive complete copyright protection under federal law and the international treaties to which the U.S. belongs? Or that if you would like to use some music to go with your animation, you can use any song you’ve ever heard for free just so long as you don’t use more than four bars from it? Although you will not find such folklore debunked on popular myth-busting websites like www.snopes.com, they are in fact urban legends.

The truth is that, although copyright protection in the U.S. exists from the moment a work is created and expressed in any tangible medium, you still need to register your work with the U.S. Copyright Office in Washington D.C. to avail yourself of important statutory protections; e.g. timely registration is required to recover your attorney’s fees (at the court’s discretion) if your work is infringed, to be entitled to up to $150,000 per work wilfully infringed, and just to be allowed to bring litigation for copyright infringement. Copyright registration applications are relatively inexpensive ($45 filing fee as of July 1, 2006) and may be prepared without the assistance of an attorney. I often help clients with their first one and those who are so inclined then file on their own additional ones involving similar subject matter and authorship issues. The U.S. Copyright Office’s website is also a very helpful resource: www.copyright.gov.

Similarly, U.S. copyright law recognizes neither a “four bar rule” nor its apocryphal cousin the so-called “eight note rule.” Federal courts certainly have awarded large damages for copyright infringement involving less usage. If you need to use a third party’s music, obtain a license (specifically, a synchronization license if you are using the music to go with any image). I assure you it is a very painful and costly process to invest your resources into creating awesome animation only to be hit after its release with a cease and desist (or worse yet, an actual injunction!) from the copyright holder of the music you used without license. If there is any lip-synching or other visual timing involved, the hassle of changing the animation to synchronize it to new sounds could be particularly troubling to an animator—especially one already trying to meet a deadline. Another wrinkle: depending on the song, there could actually be three different copyrights you need to clear: one person could hold the copyright in the musical arrangement, another in the lyrics, and a completely different person could own the actual sound recording. Be sure that you are intimately familiar with all relevant rights clearance issues and reduce to writing any agreement made to clearly document the rights you have licensed.

Another common misperception is that copyrights only protect “the right to copy.” In the U.S., copyrights actually provide a bundle of rights; namely, they include the exclusive right to exclude others from doing any of the following with regard to the copyrighted work: (1) to reproduce it; (2) to create any derivative work that is based on or incorporates it; (3) to distribute it to the public; (4) to publicly perform it; and/or (5) to publicly display it.

To own a copyright you—or your employee if Work For Hire laws apply—must have created it; ownership also can occur if the copyright either was assigned or exclusively licensed to you. Whether you are the copyright owner and wish to license it to others, or whether you wish to license a copyrighted work from another, a fully informed understanding of each right contained in the bundle, and the myriad ways you can creatively license those rights, whether separately or the bundle as a whole, might be critical to your success.

If you are the copyright owner, you will want to maximize your ability to benefit from your work’s economic success; e.g., unless you’re presented with an opportunity you just can’t refuse, you typically will not want to accept a lump sum for your work, whether through an outright assignment of all your rights in it or by an exclusive license that does not provide you with reasonable minimum royalty or agreed upon exploitation assurances. Instead, you ideally would like to license the work so that the licensee must meet certain performance obligations and so that you will share in your licensee’s profits as the work is exploited. Conditions permitting, you will want to reserve the right to grant additional licenses to the work in different complimentary markets and to be able to create new derivative works that are based on or incorporate your work (e.g. sequels, merchandise, tie-ins, etc.), provided, of course, that the foregoing do not cannibalize the value of any license you’ve granted. If the licensee does not satisfy the conditions of your license, you will want the right to terminate the license so you may work with a new licensee.

If you find yourself seated on the other side of the bargaining table, then you typically want to pay as little as possible to receive all rights in and to the work, whether through an outright assignment or an exclusive license with minimal performance obligations that, when met, automatically convert the license to an irrevocable, perpetual grant (subject to certain termination rights granted under U.S. copyright law). Of course, once you own the copyright, you will want to more prudently exercise your rights in it by only granting to third parties licenses that will both maximize the likelihood that your licensee will devote appropriate investments and other resources to give your work a reasonable chance at commercial success and that are structured so that as your licensees get paid, so do you.

Assuming you are smart, talented, and the copyrighted work is commercially viable, leverage is often the one thing that will separate those who reap the economic rewards of copyright ownership and those who do not. Leverage obviously can result from having a substantial market presence that provides significant distribution, labor, and marketing opportunities, but it also can come from something that is much easier to obtain yet so often overlooked: knowledge. Learn to understand what is the stuff of urban legends, what the law actually provides, and how to protect and use to your advantage the powerful rights and licensing strategies available to copyright owners.