Corporate Counsel’s Role in Managing Copyright

Corporate Counsel’s Role in Managing Copyright

Copyright compliance in an organization is usually undertaken without consulting in-house counsel.  These copyright compliance issues may be a librarian photocopying or scanning an article, the marketing department uploading photographs to an Intranet or website, or the IT department loading computer software onto a computer. This post discusses the role of corporate counsel when it comes to copyright management and compliance.

Copyright and Corporate Counsel

Corporate counsel and copyright complianceThere are several measures corporate counsel can be involved with in terms of lowering the risk of copyright infringement in an organization.  These include the following:

  • Corporate counsel can et employees know that they are available for consultations for uses of copyright-protected materials.
  • Where appropriate, corporate counsel may advise their organization to purchase insurance that will pay costs such as “after-the-fact” licenses and monetary payments to a copyright owner in case of a copyright infringement suit against you.
  • Corporate counsel may implement a permissions procedure on obtaining copyright permissions.  A procedure that is consistently used throughout an organization can be a huge help towards copyright compliance.
  • Corporate counsel can ducate employees about what’s protected by copyright, how to analyze a fair use/dealing situation, software and other licenses, and the penalties for violating copyright.
  • Corporate counsel can review all licenses as they are negotiated and ensure that the terms and conditions in the licenses meet the needs of the organization.
  • Corporate counsel can initiate a register of computer software purchased by the organization.
  • Corporate counsel can conduct periodic copyright compliance spot checks to ensure that only licensed content is being used, or content in which the organization owns the copyright.
  • Corporate counsel can help develop a written copyright policy and keep it regularly updated.  The policy needs to be communicated to all.

See our Online Copyright Courses

Infringement Cases

Is infringing copyright becoming riskier?  Hard to say. Two court cases which remain in many corporate counsel’s minds in the U.S. concern Knowledge Networks and Legg Mason.

Knowledge Networks, a U.S. market research consulting company, paid $300,000 US for distributing copyright-protected articles and research reports to employees via e-mail newsletters. The company had been forwarding articles from publishers such as Reed Elsevier and the Associated Press, without obtaining licenses or permissions.

In Lowry’s Reports v. Legg Mason, a jury awarded $19.7 million US in damages to Lowry’s Reports, Inc. for copyright infringement by Legg Mason, Inc. In this case, Legg Mason had purchased one subscription of “Lowry’s New York Stock Exchange Market Trend Analysis” newsletter. Legg Mason employees copied, faxed and disseminated copies of the newsletter, and later posted an electronic version of the newsletter on its Intranet, over a period of several years.

Risks Involved in Unauthorized Use of a Work

There are several risks your organization may face when an employee infringes copyright. First, you may face paying a copyright fee after using the copyright-protected work, or defending your organization in a law suit. Second, you may face public embarrassment by the fact that you used copyright materials in which you did not have the permission.  This may be damaging especially for a publicly-funded organization or an organization that either creates or promotes copyright-protected works.  Third, you may need to stop using the non-cleared work(s) which may encompass such things as removing an image from your website, or re-printing a print publication which includes the work(s).

To assess your risk of using unauthorized materials, consider the following:

  • The origin of the work(s). Is the author well known? This may be riskier. Does the author or copyright holder have a reputation for strictly guarding uses of its works?  Is the copyright owner likely to pursue legal action or to negotiate a copyright fee? Is the copyright owner likely to proceed through a trial if he commences an action?
  • Who will have access to the work(s)? If it is being reproduced on the Internet, then it is accessible to a huge number of people around the world.
  • Analyze your budget for after-the-fact royalty payments, settlements out of court, court-related fees, and infringement-related legal advice.
  • What are the “political” consequences of using materials without permission? Would bad publicity mean less public funding? What would be the message to the public about respect for copyright law?
  • Do you have insurance coverage for copyright infringement?  Would this use be covered? How would this affect your coverage and premiums?
  • What are the “emotional” costs of a claim against you for copyright infringement? How would this affect your employees and governing body?
  • Weigh the time and inconvenience of dealing with an infringement claim with the advantages of using unauthorized materials.

Corporate Counsel’s Role in Copyright Management

Corporate counsel have a delicate role vis-à-vis copyright management.  They need to find a balance between micro-managing copyright uses in their organization – and avoiding copyright infringement.  Education and providing tools such as a copyright policy or written copyright guidelines are steps towards positively contributing to managing copyright. Work with your counsel to develop best practices to lower your copyright risks.


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