Intellectual property is a unique legal concept that grants ownership rights over novel ideas, creations, artistic works, brand identifiers and more. Much like a landowner has the right to prohibit trespassers from entering or occupying their property, intellectual property owners have the right to prohibit the unauthorized commercial use of their brainchild.
Civil damages and penalties arising from the unauthorized commercial use of intellectual property can financially obliterate a small business, whether or not infringers knew they were doing anything wrong. Therefore, understanding the nuances between different intellectual properties and the rights they confer can be imperative to the survival of a cash-strapped small business.
But before we delve deeper into this bottomless abyss of legalese, it is important to summarize the three different types of intellectual property:
- Copyrights protect creative works of authorship, such as drawings, pictures, articles, videos, books, musical compositions, software, etc.
- Trademarks protect business names, slogans, logos and similar marks that carry a “likelihood of confusion.”
- Patents grant inventors a limited monopoly to reproduce a useful and non-obvious invention in return for full public disclosure of the invention. A patent can include a unique process or method, a machine, a tool or even a chemical composition.
Now that we have a basic understanding of the different types of intellectual property, let’s examine the most common ways small businesses unintentionally infringe on one of these three protections and how your business can prevent it.
1. Using a Picture Without Permission
Small businesses often scour the web for images to use in print advertisements, brochures, coupons and websites. Many business owners fail to realize that pictures on the web are often copyrighted, and using them without permission can result in hefty fines up to $150,000.
Popular image-based websites, such as BuzzFeed, have recently been sued for using copyrighted pictures without permission. For example, photographer Kai Eiselein alleges that BuzzFeed used his picture of a soccer player without permission, demanding a whopping $3.6 million in damages. Although it is unlikely that Eiselein will recover the entire $3.6 million, he will probably garner a sizeable amount.
There is a common misconception that using copyrighted material is acceptable as long as you give credit to the original copyright owner. This is not true, and merely giving credit to the copyright owner may not be enough to prevent infringement. “Credit” is different than “permission.”
To avoid such issues, small businesses have a few different options. The safest option is to obtain permission by receiving a license from the copyright owner. Ideally, a license agreement should be in writing to minimize misunderstandings and disagreements that often arise from verbal licenses.
Small businesses can also utilize Public Domain sources whose copyrights have expired. Another source is Creative Commons, which features some media with licenses that allow for fair use, but Creative Commons has recently beenunder fire over copyright issues, so even in these cases, it is best to contact the copyright owner to receive direct permission. The last option is to abstain from third-party media altogether.
2. Using a Business Name Similar to an Existing Trademark
Trademarks not only prevent the same name, slogan or logo from being used by a different business, but they also prevent names that carry a likelihood of confusion with an existing trademark. Likelihood of confusion occurs when two trademarks are similar and the two companies offer similar goods or services, leading consumers to believe that they come from the same source. Thus, similar trademarks can peacefully coexist if they offer unrelated goods or services unlikely to cause marketplace confusion.
A few years ago, a small bakery named “My Dough Girl” was essentially forced to change its name after Pillsbury, the conglomerate responsible for the famous “Doughboy” mascot, claimed it was too similar and could cause confusion in the marketplace. In a similar case, women’s clothing retailer Victoria’s Secret forced a small business named “Victoria’s Little Secret” to change its name because there was a likelihood of harm to Victoria’s Secret popular trademark and brand.
Before your small business invests capital in marketing and promoting a business name, logo or slogan, it is prudent to check both the same and similar trademarks within the your business’ industry to avoid any potential conflicts that may force you to start again from scratch. This article can provide guidancefor conducting a word or mark search.
3. Using a Song Without Permission
Like images, musical and lyrical compositions enjoy copyright protection. It might sound like a good marketing ploy to use a famous song or jingle to help promote your company’s offerings, but it could lead to possible lawsuits and hefty fines. Again, simply giving credit to the musical or lyrical composer will not be enough to protect your business from liability.
GoldieBlox is an up-and-coming company aimed at inspiring little girls to innovate and build with uniquely manufactured engineering and construction toys. One of its promotional videos used a copyrighted song by famed 1990s rap group the Beastie Boys without permission. GoldieBlox claimed that the ad was a parody and the use was protected by copyright’s “fair use” doctrine. This, however, wasn’t the case, and the Beastie Boys and GoldieBlox eventually reached a settlement that required GoldieBlox to issue a formal apology and to make a donation to a charity of the Beastie Boys’ choice.
4. Using a Celebrity’s Name, Picture or Likeness Without Permission
A hybrid intellectual property and torts concept called the “right of publicity” grants individuals the right to protect their name, picture and likeness from unauthorized commercial use. Many states have codified the right of publicity with statutes, while other states offer protection through common law. This concept not only protects a celebrity’s name and picture, but also prohibits impersonators that exploit a celebrity’s likeness.
Maroon 5 lead singer Adam Levine brought suit against video-game producer Activision for using his likeness in a game called “Band Hero” without his permission. The suit claimed that, although Levine allowed Activision to use his name and song in the game, he did not allow Activision to use an avatar with his likeness that sang songs from competing musicians. Levine claimed that he would not have allowed such use if Activision sought permission.
In another case, Bette Midler famously won a verdict against Ford Motor Company for using an impersonator that exploited Midler’s distinctive voice. The appellate court concluded that an individual’s voice is part of their identity and it is unlawful to imitate a voice without permission. So the next time you’re creating a new commercial or company video, be careful about impersonating a celebrity or public figure.
5. Allowing Employees to Illegally Download Music, TV Shows or Movies
This may not be immediately apparent, but your business could be liable if employees download copyrighted music, TV shows, movies and software while at work. Two different legal theories could make your business liable for such infringement. In one such theory, contributory copyright infringement occurs when your business turns a blind-eye to employee copyright infringement. In the other, vicarious liability could make your business liable as long as the employee is acting in the “course of employment.”
Increasingly, businesses are allowing employees to listen to music while at work. If this is a perk at your organization, it is vital to ensure that they are listening to music through a legal intermediary that does not infringe on copyright. To help ensure compliance, enforcing an internet use policy could be helpful to inform employees of your business’ expectations. However, simply distributing a policy will not insulate your business from legal liability. You must continually police employees’ internet use to ensure no infringement is occurring.
Better Safe Than Sorry
If there is one thing you take away from these examples, it should be that it is better to be safe than sorry. If you are unsure whether using a picture or song will result in infringement, err on the side of caution, and simply abstain from using it. A single case of infringement can debilitate your business, and using protected material is never worth the risk of financial ruin.