SESAC, SoundExchange, SoundScan: Why Are Music Royalties So Confusing?

Many indie artists are confused about the difference between ASCAP, BMI, SESAC and SoundExchange, not to mention SoundScan, the Harry Fox Agency, and the role of their own publishing company and record label when it comes to collecting and paying money under the exploitation of their music.

The problem with not understanding these concepts is that you could get taken advantage of by unscrupulous players in the business or just simply lose out on valuable revenue.  A 2015 Berklee College of Music report found that anywhere from 20-50% of music payments do not make it to their rightful owners!

This post aims to provide independent songwriters and musicians some basic information to help them understand various music royalty issues.

Music Copyright Basics

To understand music royalties, it helps to understand the underlying legal framework behind music copyright in the U.S.

Under our Copyright Act, any musical work that has been reduced to a recording has two copyrights: (1) one for the sound recording embodying the performance, and (2) one for the underlying composition (musical arrangement and lyrics).

 

Happy Birthday Composition
Happy Birthday Composition
Happy Birthday Sound Recording
Happy Birthday Sound Recording

A composition or sound recording copyright gives you the following bundle of rights:

  • The right to reproduce the work (make physical or digital copies)
  • The right to distribute the work (sell, share or give away for free)
  • The right to make derivative works (made other arrangements or cover versions)
  • The right to publicly perform the work (a “performance” can be live or a replay of the recording of the work)

Additionally, there is one more right specially provided in the law for only for sound recording copyrights:

  • The right to perform the copyrighted work publicly by means of a digital audio transmission.

A lot of the confusion regarding music royalties comes from the fact that each of these distinct rights may produce royalty money for the copyright holder or the performer (or both!).   Moreover, over the years, different organizations have taken charge of managing or administering these rights for songwriters and performers, and certain “rules” have been established not based on the law, but on industry practice.

One example: the industry divides composition copyrights into a 50% “publisher’s share” and a 50% “songwriters share”, even though there is nothing in the Copyright Act dividing legal rights in this way.

Another example: composition copyrights are often assigned to publishing companies, whereas sound recording copyrights are often owned by the record label who paid for the production and promotion of the recording.  Meanwhile, a number of special royalty-collecting organizations have sprung up to address the practical realities of monitoring the use and performance of music on a nation-wide scale.

The Public Performance Right (Traditional vs. Digital)

ASCAP (American Society of Composers, Authors, and Publishers), BMI (Broadcast Music, Inc.)[1] and SESAC (formerly, the Society of European Stage Authors and Composers) are U.S. public performance organizations (PROs) who help copyright holders collect performance royalties for the public performance of music compositions.

Radio stations, concert venues, sports arenas, bars, restaurants, malls – any place where the public is generally free to enter and music might be played – all pay fees to PROs.  In exchange, they get a blanket public performance license that gives them permission to play live or recorded music at their location.  The PROs pass these collected license fees on to the composition copyright owners.

Complicating the understanding of how PROs work is that they follow the 50% publishers share and 50% songwriters share scheme, so even if a composer or songwriter has assigned 100% of their composition copyright to a music publisher, the composer/songwriter will still get money directly from their PRO.  If a composition copyright owner does not have a publishing company, they will receive both halves from their PRO.[2]

Meanwhile, SoundExchange is a PRO that collects performance royalties under a different right under copyright law.  SoundExchange assist copyright owners of sound recordings (not compositions) under digital performances (not traditional performances) of those works.

While there is huge amount of music that is transmitted over the Internet and other digital formats, it is key to realize that SoundExchange only collects digital performance royalties on non-interactive streaming services where the listener cannot control what they hear (i.e., a DJ or an algorithm is selecting the songs).  Thus, music providers such as SiriusXM, Pandora and cable music stations pay licensing fees to SoundExchange.  SoundExchange splits up the royalties it collects into 50% for the record label, 45% for the “featured artist”, and 5% for the “non-featured artists” (i.e., sessions musicians, background vocalists, etc.).  Again, SoundExchange does not pay royalties to composition copyright owners.

SoundExchange does allow its royalty payments to expire if an artist does not register and collect them within a certain time frame, so if you are an artist who is in any way featured on recorded music, you should create an account with this PRO right away!

The Reproduction and Distribution Right

Songwriters and performers who want to sell their music to the public generally desire contracts with either a record label, record manufacturer or a distribution company (sometimes, a combination of these), in which they will license their rights under copyright to reproduce and distribute their works.  There are many ways to arrange these relationships and if you can, you should negotiate for an arrangement that works best for you.  Then, make sure you have a straightforward written agreement that correctly reflects the understanding you reached with the record label, manufacturer or distribution company.

Most record labels and manufacturers will collect all revenues from any exploitation of the copyrights, then pay royalty payments to the songwriter or artist on a predetermined percentage based on units sold.  A big negotiate point is also whether the label or manufacturer will “advance” money to the artist to produce, press or promote the music, and how they get to recoup those costs.

To keep track of units sold, much of the music industry uses SoundScan, a service that tracks sales of music products throughout the United States and Canada.  Record labels often rely on SoundScan to determine the royalties earned or due to one of its contracted artists.  SoundScan is also the data source for the Billboard music charts.

Mechanical Royalties are payments made for the rights to include a composition in a sound recording (under a copyright owner’s right to copy and distribute).  Under U.S. copyright law, once a song has been published, anyone can record it as long as the statutory mechanical license is obtained and the fee established by the Copyright Act is paid (the current statutory rate is 9.10¢ per copy for songs 5 minutes or less).  Many composition copyright owners (including publishing companies) authorize the Harry Fox Agency to issue mechanical rights licenses on their behalf, and the law treats these royalties for physical products (CDs, vinyl) and digital products the same.

Synchronization or “Sync Licensing” is when a composition copyright owner grants permission to use their work in an audiovisual setting, such as a movie, a TV show, a videogame or in a commercial.  There is no statutory or industry standard rate for this.  It is negotiated based on a number of factors.  Sync licensing is becoming an ever more important source of income for songwriters and publishers.

A “master license” is needed in conjunction with a sync license if someone wants to use the sound recording of the licensed composition as well.  It is possible to get a sync license and simply re-record your own version of the work if you do not want to pay for, or are unable to obtain, the master license for a certain song.

International Royalties

A discussion of the many different music laws, royalty schemes, PROs, and other supporting organizations located outside of the U.S. is beyond the scope of this post, but many international schemes are similar to ours, so if you understand the underlying copyright law and framework here, you will have a leg up as you begin to distribute and sell your music internationally.

If you have questions or corrections about any of this information, or needs assistance with a publishing contract or record contract, give our Arts & Entertainment team a call!

 

 

 

 

 

 

[1] Inside tip: If you’re an artist who constantly performs your own compositions in live concerts, but you’re not on the radio or TV, you can sometimes make special arrangements with BMI (but not ASCAP) to get paid.

[2] Another inside tip: If you sign up with ASCAP without a publishing company, you will need to register a “vanity publishing company” – make something up for ASCAP. If you don’t do this, you will only get half of your money.

What’s a Copyright Troll?

DTG’s Intellectual Property Team has seen a new and unwelcome legal trend emerge in Colorado over the last few years: copyright trolls.

Peer-to-Peer (P2P) File Sharing Lawsuits

Since in 2010 and really ramping up in about 2012-2013, a small group of copyright owners has flooded our federal court system with lawsuits against tens of thousands of “John Doe” defendants. These lawsuits are based on alleged copyright infringement on peer-to-peer file-sharing networks (for example, using the BitTorrent protocol).  The lawsuits are sometimes initiated against a single defendant, but more often than not are filed against dozens or even hundreds of John Doe’s in a single lawsuit.

What Makes a Plaintiff a “Copyright Troll”?

 We call these “copyright troll” lawsuits because:

  • The suits are rarely brought by the actual copyright creators or bona fide owners, but by a company, as an assignee[1], whose sole purpose appears to be to file hundreds of lawsuits against online file sharers.
  • The claims of infringement often rely on poorly-substantiated pleadings with language that shows a fuzzy understanding of how the technology behind P2P file sharing actually works.
  • Due to the high volume of actions filed, the lawsuits frequently catch up non-infringers in daunting legal proceedings.
  • The strategy represents an opportunistic way to collect hundreds of “nuisance settlements” from defendants who are confused, intimidated and overwhelmed by being sued in federal court.

The Copyright Troll Business Model

 The copyright troll business model works like this:

  • Monitor online file-sharing networks and collect evidence of possible infringement. Copyright trolls often use a process that produces a list of alleged infringements with associated Internet Protocol (IP) addresses.
  • File a complaint in federal district court alleging copyright infringement by individuals who are identified only by IP addresses.
  • Seek a court order to compel Internet Service Providers (ISPs) to provide individual account holder information matching the IP address.
  • Contact those account holders by letter and threaten to seek very large awards of statutory damages (up to $150,000 for a single download!) but offer to settle for amounts ranging from $3,000 to $8,000.
  • Settle as many cases as possible, and abandon virtually all the rest.

In other words, copyright trolls play a numbers game, targeting hundreds or thousands of defendants to secure quick settlement payments priced just low enough that it is less expensive for the defendants to pay than to defend themselves in court. This business strategy has netted copyright troll plaintiffs millions of dollars in settlement payments!

If you’ve received a letter from your ISP about a legal order (subpoena) to reveal your identity to the Colorado district court, or a letter from a copyright troll demanding a huge settlement, please contact us at once. Our experienced team of intellectual property and litigation attorneys can help you resolve your case in the best manner possible. Our team is listed in the Electronic Frontier Foundation’s Subpoena Defense Resources page.

 

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[1] Examples of these copyright troll companies include I.T. Productions, LLC; Killer Joe Nevada, LLC; CELL Film Holdings, LLC; Survivor Productions, Inc.; and Dallas Buyers Club, LLC.

Can I Embed Someone Else’s Tweet on my Website?

That Tweet that has been making the rounds, and maybe even gone viral, should be fair game, right? Everyone has been retweeting it, so embedding the original tweet into my website isn’t hurting anyone…riiiight?  Well, not so fast. The answer may depend on where the case is heard.

Katherine B. Forrest, a U.S. District Judge for the Southern District of New York, recently issued an interesting order on this issue. Seems that Breitbart News Network, Yahoo, and a number of other online news outlets failed in making the same argument.

It seems that they all embedded a tweet (which had gone viral) into their own online websites. The tweet included a photograph of Tom Brady taken by Justin Goldman, and originally posted by him to Snapchat.

The photograph caught fire and several users uploaded it to Twitter, and eventually landed on the news websites. Goldman argues that he never publicly released or licensed the photograph, so he’s suing for infringement of his exclusive copyrights in the image.

The news outlets claim that they never actually downloaded or copied the photograph because it technically remained housed on the Twitter servers, linked through the embedding code on their own websites.

In what some have labelled a “surprising” decision, Judge Forrest set aside the 9th Circuit’s “Server Test”, which would determine infringement based upon whether an image is hosted on the alleged infringer’s server. Rather, she granted partial summary judgment to Goldman, holding that the fact that the image was never stored on the news websites’ servers was not dispositive.

Judge Forrest did leave the issue open as to whether the news outlets had raised effective defenses against infringement—citing potential arguments under fair use, the Digital Millennium Copyright Act and innocent infringement theories.

In reaching her decision, Judge Forrest examined the exclusive right to display the photograph (as opposed to copy or make a derivative work) granted to Goldman under the Copyright Act of 1976. Her opinion delves into a history of the right to display and the fact the drafters of the Copyright Act wanted it to encompass “new, and not yet understood, technologies,” such as Twitter.

Her decision also references a 10th Circuit decision, out of the U.S. District Court for the District of Colorado, which came to a different result. In Colorado, the District Court has (at least for the time being) applied the “Server Test” to a similar case.

In the 2016 Grady v. Iacullo decision, the Court held that, when a website includes a hyperlink to a copyrighted work, a copy has been created and infringement may have occurred. “transferring a copyrighted work into a computer’s RAM can create a copy under the Copyright Act.” However, the court requested that additional information be provided to it by the parties and a final ruling has not been made.

While final rulings and appeals are yet to be announced, beware the shifting sands of technology…embedding another’s image in your website may be more trouble than it’s worth.

If you have questions about this or any other copyright or licensing issue, contact our Arts & Entertainment Team today.

Could AI Get a Copyright?

In 2016, a group of museums and researchers in the Netherlands unveiled a portrait entitled The Next Rembrandt.  This painting was actually generated by a computer, which had analyzed thousands of works by the 17th-century artist Rembrandt Harmenszoon van Rijn, and then used the data to create its own work in the same style.  In the same year, a Japanese computer program wrote a novel called The Day A Computer Writes A Novel, which remarkably passed several rounds of judging for a national literary prize.

Meanwhile, Google is developing an artificial intelligence program that it hopes will write news articles, and already owns an artificial intelligence company called Deep Mind that has created software that can generate music.

Other AI projects have been able to develop computers that can edit photographs, write poems,  and even compose complex musical works with no human involvement.

Creating copyrightable works using artificial intelligence (AI) will undoubtedly have very important implications for copyright law. Traditionally, determining the owner of a copyright in computer-generated works was not a problem because the computer or software was merely a tool that supported the creative process, analogous to a pen and paper or camera and film. Now, AI is now creating works free from any direction or assistance from humans!

Since the advent of mechanical ways to play music (think player piano rolls in the 1880s), new technologies have always exceeded the boundaries of the existing copyright law, meaning the courts and the lawyers have been forced to stretch existing doctrines in their attempts to encompass the novel and unprecedented scenarios presented by this new technology.

The next frontier in copyright law, and issue that will test the language in our current statutes, will involve works created directly by computers.  Right now though, these copyright implications are by no means clear. Should these original and creative works still be deemed to be made by a human author (i.e., the individual who designed or programmed the AI or initiated the “go” command) or independently by the AI alone? Would it be legally just to refuse to grant copyrights to music, novels, dramatic works and art created by AI?  Would this refusal harm the content creation industry?

Our Intellectual Property Team will certainly be following these efforts!

I Haven’t Been Paid, But They’re Using My Images!

I’ve noticed a recent trend with artists calling to get help resolving a contract issue. The scenario usually unfolds something like this:

  • The Artist had been contacted by a promotor/client/other artist to help capture photos or video.
  • There is no written agreement, other than a few texts back and forth about payment rate and when to show up to the shoot.
  • The Artist does the shoot, edits their product, and provides one or several complete products. This can be a series of photos or a few versions of a promotional video.
  • The client begins using the completed works or forwards them on to their own client. The Artist usually finds this out by seeing the work on a website or FB feed.
  • The Artist never gets paid and receives continued assurances that payment will come once the client receives payment from their own client.

What a horrible position for the Artist to find themselves in, and what an unsustainable reputation for the client to establish within the market!

But, not all hope is lost—copyright law can help the Artist gain some leverage in negotiating a resolution. The main thing the Artist should remember is that copyright in the images remain with the Author until there is an affirmative act to assign or license those rights to another. The Artist is the Author and retains copyright, unless they are 1) the employee of the client or 2) there is a written, signed agreement that defines the work as a Work Made For Hire, assigns the work, or licenses the work.

Without a WRITTEN AGREEMENT, a contract Artist has not given the client any rights to reproduce, display, or otherwise use the work. This can often provide a lot of pressure to get payment when the Artist clarifies this to the client. Without rights in the work, the client is arguably infringing on the Artist’s copyright when reusing the work or selling it to a third-party. In our experience, a well-crafted cease and desist notice to the third party can generate immediate attention and payment.

Even with a written agreement, the doctrine of Work Made for Hire is often misunderstood by artists and their clients. Very few types of projects qualify for treatment as a Work Made for Hire. Even if there is a clause that attempts to identify the client as the copyright owner, it often fails.

Of course, every situation is different and you should contact a lawyer that specializes in artist representation before taking action. Your attorney can help you review communications and written agreements to assess what next steps can help you get paid.

To help minimize the potential for conflict, always get your agreement in writing and clarify when payment is due (payable in stages with various deliverables, and never dependent upon whether the Artist’s client gets paid by a third party).

If you need assistance getting paid for your work or understanding the contract you’re being asked to sign, please contact our Intellectual Property Team today.

 

What Can I Copyright?

Copyright is a type of intellectual property that protects “original works of authorship.”

Literary works (poetry, novels, newspaper articles), musical works (songs and their lyrics, orchestral compositions, movie scores), dramatic works (films, plays) and visual arts (paintings, prints, comics, sculptures) easily come to mind when thinking of works that probably have copyright protection.

However, copyright can be a lot broader! U.S. law allows you to claim copyright in software, architecture, fictional characters (for example, Superman), pantomimes and even your business’s logo.  Online, the contents of a website or blog, including its text, graphics and videos, can also have copyright protection.

This broad nature of copyright is no accident.  The Copyright Act acknowledges that future technologies may create new kinds of content that can be protected.  When the founding fathers provided for copyright in the U.S. Constitution more than 200 years ago, they surely could not fathom billion-dollar superhero movie franchises or the Internet!

So, instead of providing an exhaustive list of things that can have copyright, the law simply establishes certain elements that must be met for a work to have copyright protection.

Elements of Copyright

To be copyrightable, a work must:

  • Contain a minimal degree of creativity
  • Be created by a human author

The recent case of Naruto v. Slater[1] confirmed animals are not afforded rights under U.S. copyright law.  This ruling meant “Naruto”, a crested macaque monkey who took a charming and commercially-viable selfie, could not sue to own the copyright of the photograph.

Macaca_nigra_self-portrait_large

  • And be fixed in a tangible medium

The work has to be captured in a way to that it can be perceived, reproduced, or communicated for more than a short time.

Copyright protection in the U.S. exists automatically from the moment the original work of authorship is fixed.  You do not have to register the copyright, print a copyright notice on the item, or publish the work to have copyright protection!

(But read more about why you should register your copyrights in our blog post here.)

Exceptions to Copyright

Copyright does not protect ideas, procedures, systems or methods of operation.

Copyright also does not protect facts and mechanical, clerical content (for example, a phone book).

Copyright does not protect simple, short phrases.  If you wrote a pop song with only one lyric – “Baby, I really love you…” – you probably wouldn’t be able to copyright this phrase and prevent other songwriters from authoring similar sentiments.

Copyright also does not protect content authored by the U.S. Government.  Thus, you can freely quote federal governmental reports, publications, websites and laws.  Be careful though!  This exception is not true for other governments, such as the U.K.

If you have questions about copyright law, how to register your works with the U.S. Copyright Office, or what to do if you think someone is violating your copyrights, contact our Intellectual Property team today.

[1] 15-CV-04324-WHO (N.D. Cal. Jan. 28, 2016).

Photo Credit: Kelli Tungay on Unsplash

Why Should I Bother to Register My Copyright If My Work is Automatically Protected?

We get this question a lot.  Artists, designers and other creative entrepreneurs are busy people!  So, why should you go through the trouble of registering your copyrights and putting copyright notices on your works if, under U.S. Copyright law, you have copyright protection as soon as your work is “fixed” in a tangible medium?

We understand the instinct that you surely have better things to do with your time and money, but notice and registration are what give our copyright law its teeth!

Let’s say you discover that a major fashion retailer has copied your artwork on t-shirts and has been selling it all over the world?  You file a lawsuit and the judge finds in your favor.  You won!

Or maybe you wrote a catchy melody and uploaded a YouTube video of yourself playing your guitar and singing it.  A major brand uses part of your melody in its new commercials for cleaning products.  You file a lawsuit and the judge finds in your favor.  You won!

Having a valid copyright registration may mean the difference of being awarded $100,000 in statutory damages, plus an order that the other side has to pay your attorneys fees, versus having only a piece of paper from the Court saying you were right and a $15,000 bill from your lawyer you now have to pay.

In other words, to really benefit from copyright law, you need to have a copyright registration certificate from the U.S. Copyright Office, and you have to let others know you claim copyright protection in your content.

Statutory Damages and Attorneys’ Fees

Current copyright statutory damages are set out in 17 U.S.C. § 504.  They range from $750 to $30,000 per work, an amount to be determined at the discretion of the Court depending on the facts of the case.  However, if a defendant can show that they were “not aware and had no reason to believe” they were infringing copyright, they may ask the Court to have the damages reduced to $200 per work.[1]  This is why providing notice is key.

If you can show the defendant was willful when it infringed on your copyright – it was deliberate, voluntary and intentional – a judge is authorized to award you damages of up to $150,000 per work![2]

Also, if you did properly place some kind of copyright notice information on or in your work, and the defendant intentionally removed it before they copied you, they could be liable for an additional $200 to $25,000 per occurrence under the Digital Millennium Copyright Act (DMCA)![3]  An example of this would be a website owner cropping your photograph in a way that the copyright notice information you’d place in the bottom corner, and then publishing the image online without your permission.

In other words, statutory damages can really add up, and they allow you to avoid having to hire damages experts to prepare costly reports and testify on exactly how much you were financially damaged by your infringer’s activities.  Moreover, attorneys’ fees provisions means if you are successful in your lawsuit, the other side pays your lawyer’s bill.  Even if a lawsuit is never filed, copyright registration and the mere threat of statutory damages can provide you leverage to protect yourself and your business.

What Is “Notice”?

A good copyright notice lets the public know that (1) the content is protected by copyright; (2) who the author or owner is; and (3) when it was first published.

Beyond this, there is no required form or method for providing this information.

One way is:

Copyright © 2018 Sally Jones.  All rights reserved.

Or simply:

© 2018 Sally Jones

You could also provide more detail:

Copyright by Sally Jones.  Originally published November 29, 2017.  Revised on January 2, 2018.

You may have noticed major movie studios like Roman numerals:

© Time Warner Studio MCMXCVIII

In other words, so long as you provide the required notice, the form and format is up to you.

If you have more questions about registering your copyright, or think your copyright is being infringed upon, give our Intellectual Property team call.

 

[1] 17 U.S.C. § 504(c)(2)

[2] Id.

[3] 17 U.S.C § 1203(d)

What the “This is Spinal Tap” Case Means

We are watching the lawsuit between This is Spinal Tap creators, Harry Shearer, Christopher Guest, Michael McKean and Rob Reiner, and Vivendi very closely. This case revolves around issues that we always pay close attention to for our creative clients: net profit definitions, copyright termination, and work-for-hire.

On October 20, 2017, Shearer, McKean and Reiner joined Guest in a Second Amended Complaint as individual Plaintiffs. This followed the dismissal of their loan-out companies, which were originally named as Plaintiffs, but found to have no standing. The pre-trial grappling will continue over the next months and this case is expected to have far-reaching implications for Hollywood’s “inventive” accounting practices.

Essentially, studios enter internal contracts with their own subsidiaries that fall far short from arms-length transactions. This allows the studios to deduct enormous expenses against the gross profits of a film, sometimes package them together with the expenses of poorly performing films, declare that there are no net profits in a project, and make no payouts under the net profits provisions of contracts with creatives. These accounting practices have meant that actors and writers associated with such “unprofitable” blockbusters as Return of the Jedi, Ghostbusters, Harry Potter and the Order of the Phoenix, and Forrest Gump have had to bring or threaten legal action before receiving their fair cut of royalties.

Not only have the co-creators of This is Spinal Tap requested a proper accounting of the net profits derived from the distribution and merchandizing of the film, but they are exercising their rights to terminate the copyright assignments in their works. Copyright law permits termination of rights 35 years after the assignment, and the co-creators have filed Notices of Termination. Their suit requests confirmation that the copyrights will revert to them in March, 2019. Reversion of the copyrights will entirely cut off the studio’s ability to distribute and otherwise commoditize the film and brand.

Ironically, the studio has now been placed in a position of fighting to retain interests in a “non-profitable” enterprise. The studio is fighting to retain its copyrights in the This is Spinal Tap brand by arguing that the co-creators were never copyright owners in the first place and that there is no assignment to terminate. The studio is relying on the work-for-hire doctrine to show that it was always the copyright owner of the film and music.  At issue is the timing of the development of the copyrighted material—was it already in existence before the studio stepped into the picture, or were the requirements for work-for-hire in place when the material was created?

We love these kinds of cases because they are accessible and interesting to artists, and they help the public understand some of the nuances of copyright law. And, they help the artistic community understand why it is crucial to have an attorney review your contracts and catalogue your creative works.  When we work with clients to review contracts, net profit definitions and work-for-hire provisions are often over-reaching and unfair to our clients. These are complex areas of law and are often misapplied in contract language. We work with artists to understand their rights and renegotiate fair terms. We also help our clients track creative assets and file timely Notices of Termination when the time is right.

If you need support understanding your rights under a film or other entertainment contract, contact our Arts & Entertainment Team today.

Your Website: Tips to Stay Out of Legal Trouble – Part 1 (Copyright)

A good website for your business can be an invaluable marketing tool.  However, if you’re not careful, you could get into trouble for using images, photos, videos and other content in violation of copyright law.

Rights Granted under Copyright

Under the U.S. Copyright Act, the owner of a creative work is granted certain rights, including the right to prevent others from reproducing or copying their work, publicly displaying their work, or distributing their work.

Posting copyrighted material, say, a photograph, on your website arguably violates all these rights!  Moreover, your Internet service provider (ISP) can also be found liable for copyright infringement, even if they played no part in designing or maintaining your website.

All small business owners must therefore be extremely careful about what goes on their website!

Even big companies with sophisticated marketing campaigns get into trouble.  In May 2017, world-renowned luxury brand Tiffany & Co. was sued by photojournalist Peter Gould for using his photograph in an ad campaign for a line of jewelry designed by Elsa Peretti.  The photo at issue was a shot of Ms. Peretti back in the day.  The case was quickly settled and dismissed in July 2017, presumably because Tiffany’s agreed to write a nice fat check to Gould.

Gould v Tiffany Image

Tiffany certainly had the deep pockets to quickly deal with the lawsuit and settle, but your small business may not have these kinds of resources.

Get Permission

As a general rule, we tell our clients to assume any content they may want to use for their website, brochure, promotional video or other project is protected by either copyright or trademark law unless they can confirm otherwise.  A work is not in the public domain simply because you found it up on the Internet already (a common misconception) or because it lacks a copyright notice (another misconception).  Just because you are a local small business with not a lot of revenue and not a great understanding of copyright law does not mean you can claim “fair use” for the content either.  There are no safe harbors in the Copyright Act if you just made a mistake or misunderstood.

Finally, be aware:  If you do see an image or video is affixed with a copyright notice (or “copyright management information“) and choose to remove the info and use it anyway, this makes you liable for additional statutory damages under copyright laws.

Statutory damages range from a few hundred dollars to $25,000 per violation, meaning a mistaken infringement on your website can cost you a lot.

Investigate Infringement Claims Promptly

If someone complains about an unauthorized use on your website, remove the offending material at once and begin to investigate the claim immediately.   If necessary, consult with an attorney on how to handle the investigation and how to respond to the claimant appropriately.

You may find after your research that your use is perfectly legal.  However, you should remove the material while you investigate in order to limit your possible damages should the claimant file a lawsuit.  Continuing to use the infringing material after receiving notice will increase the chances of you being found liable and increase the amount of damages you may have to pay.

Removal of infringing material is also an element of the Digital Millennium Copyright Act (DMCA), a 1998 law establishing that an ISP can avoid liability by following certain rules, including speedy removal of infringing material.  Thus, if you don’t stay on top of copyright infringement complaints about your website, your ISP may get dragged into your mess as well.

Our Tips for a Successful Career in the Arts

Don’t let your dad who wanted you to major in business administration tell you otherwise – In today’s economy, making a living as an artist is probably more viable than it has ever been before.

Many individuals (including your dad) are under the impression that the only way to succeed in the arts is to become a superstar.  Media representations tend to present the arts as an all-or-nothing proposition, with the spotlight only given to the celebrity successes.

However, a viable career in the arts can encompass a broad range of options for those of us who aren’t necessarily nobodies, but whose lives aren’t fodder for PerezHilton.com either.  The arts are not a competition, and you don’t need to be a superstar to make a living doing what you love!

Here are some key points, some legal but many non-legal, we try to relay to our artist and creative entrepreneur clients:

  1. Identify and Maximize Various Revenue Streams

It can’t be denied that those working in creative professions often lack traditional benefits and job security.  There is nothing in this post that offers solutions towards finding a tradition 9-to-5-with-health-insurance job in the arts.  Instead, those who are able to pursue multiple sources of income and become comfortable (or even thrive) with a lifestyle with no promises of a paycheck can find career sustainability.

Experimenting with a variety of moneymaking options allows artists to discover which methods are the most lucrative.  Here in Colorado, we unfortunately do not have a long-established art collector scene like on the coasts.  However, traditional gallery art sales and online art sales may be complemented by speaking gigs, public art commissions, publishing, teaching, commission projects, crowdfunding and grants.

In other words, we believe it is a good investment for artists just beginning to establish their careers (but also for those looking to give a boost to current careers) to participate a little in a lot.  If one revenue stream (for example, gallery sales) is not doing so well, you ideally should have multiple other sources of income to fall back on.  The downside is that your schedule may be very full.  The potential upside after several years of pursuing all options is that you’ve found something that really works for your medium, personality, lifestyle and business model, and you have found financial security.

  1. Be Weird

Being “weird” could be a bad idea at a lot of jobs, but it is definitely an asset in the creative professions.  To sell art or become known as an artist, it helps to grab your audiences’ attention by creating works that are distinctly different from what is already out there.

Moreover, artists who devote time beyond their actual artwork to create a unique brand around themselves will likely have more opportunities to engage in various projects and receive more invitations to work, speak, sell and teach (all towards, see above, diversifying income streams!).  Individuals who succeed in branding themselves aren’t necessarily the most talented and brilliant artists out there, but they do produce more bankable work.  Navigating the fine line of being your authentic self yet making an impression on those around you can be tricky, but finding that balance can yield profitable results.

  1. Be Professional

Passion, talent and weirdness aren’t the only qualifications for becoming a successful professional artist.  A creative individual pursuing a career in the arts should also be able to successfully navigate the business side of their own enterprise.

For example, grants can be a good source of income for an artist or arts organization.  There are even some arts grants where, if you’ve received it once and demonstrated you were able to meet the objectives of the grant program, you can receive the same grant several years in a row.

However, groups that award such grants want to ensure their money is going to be used appropriately.  They require clear and straightforward descriptions of how the grant funds will be used, and they also need assurances that the funds will be properly accounted for once received.  This kind of due diligence is legally required for most of the foundations, endowments, 501(c)(3)s, and other organizations who are in the business of making arts grants.

If you never know the balance of your bank account or choose a casual attitude towards the financial aspects of your business, this is trouble!  It is critical to establish, and continually maintain, a high level of professionalism in your arts business.  Certain actions that can go a long way include:

  • Setting yourself up as a legal business entity with a separate business tax ID (an EIN);
  • Having separate business bank accounts;
  • Staying on top of deadlines and document requests from grant organizations, vendors, and other collaborators or colleagues;
  • Recognizing and protecting your intellectual assets (copyrights and trademarks);
  • Having a good professional services contract when you are hired for projects, shows, etc.;
  • Maintaining an active and professional online presence (social media and your website); and
  • Sustaining a solid network of mentors, colleagues, and professional advisors such as accountants and attorneys who are on your team as you navigate your career in the arts.