Some Low-Cost Steps for Protecting Copyrightable Business Assets in a Recession
By: Paul E. Thomas
February 2009
If the recent findings of information and technology security companies like McAffee, Inc. in Santa Clara, California are correct, then the threats of unlicensed and unauthorized uses of copyrighted business assets will increase during the current recession. In such economic times, companies should retrench and fortify their intellectual property (IP). There are several low-cost or perhaps even no-cost steps that companies should take specifically in regard to their copyrighted business assets.
First, companies should do an internal IP audit. This requires a review of all existing intellectual property licenses, other contracts relevant to intellectual property, and all unregistered intellectual property. Specifically in regard to copyrights, an audit can answer some key questions with information every company should know:
- Are our licenses protective enough?
- Do they require updating?
- Are our licensees complying with our license terms?
- Are any royalties past due?
- Are we complying with the licenses?
- Are we vulnerable to any claims of breach of contract?
- Are we enforcing our agreements properly?
In addition to providing such essential information, an IP audit can help a company determine whether it is maximizing the revenue from the copyrighted assets that it licenses to others.
Second, companies should make sure that their trade secrets are adequately protected. A trade secret is any formula, process, operating method, system, or other form of confidential information which gives a company an edge on its competitors. Frequently, companies express their trade secrets in confidential internal memoranda, which become copyrighted business assets of the company. Because the key to preserving trade secrets is keeping them secret, companies should make sure that security procedures are in place to prevent an inadvertent public disclosure of confidential information.
Third, companies should make sure that a proper notice of copyright appears on the company website, on all marketing materials, an on all copyrighted assets that are licensed to others. A proper notice of copyright should contain the word “Copyright,” the © symbol, the year of first publication (e.g., public distribution by sale, rental, or gift), and the name of the owner of the copyright, like this: “Copyright © 2009 by Great Company, Inc.” (Some people believe that only copyrights registered with the United States Copyright Office can use the © symbol, but that is incorrect: full statutory copyright protection, including the right to use the © symbol, inheres in a copyrightable work as soon as it is fixed in a tangible medium, like a brochure or a digital file.) While the law no longer requires an owner to make a conspicuous notice of copyright in order to enforce a copyright, copyright owners should still use proper notice in a way that is conspicuous enough to be effectively observed by another party. It makes good sense for three important reasons: (a) conspicuous notice promotes clarity in rights ownership; (b) conspicuous notice stands as first-blush evidence of ownership of a valid copyright; and (c) conspicuous notice prevents an infringer from arguing that he or she was not aware that the work was protected by copyright, and thereby asserting the “innocent infringer” defense. These days, many, if not most, consumers initially approach a company through its website, so it is very important for companies to make sure that proper notice of copyright appears in the bottom margin of the homepage of the company’s website, and, preferably, in the bottom margin of every sub-page. Because an infringing or unlicensed use of text or graphics can be easily accomplished online, a notice of copyright can be supplemented by additional language prohibiting unauthorized or unlicensed uses of website content.
In the current economic climate, prudent companies would do well to take steps to enhance their protection of their intellectual property, because enhanced protection will translate into enhanced value down the road. Many such steps in regard to copyrighted assets are low-cost or even no-cost, which is very much in keeping with our belt-tightening times.