Licensing Copyrighted Material

It is virtually impossible today to run a business without licensing copyrighted material. If you use a computer, you are probably running licensed software. If you have a website, your website probably includes licensed photographs. Unless you create your own advertisements, you may have used licensed material.

Despite the prevalence of copyrighted material, most companies are not very good at keeping records regarding their copyright licenses. License certificates for software often get lost among other business documents, and licenses for photographs, etc., are not kept or are misplaced over the years. Failing to keep copyright licenses, however, can be a significant mistake. This is particularly so in light of the application of the “Discovery Rule” with respect to copyright infringement.

A Statute of Limitations is a deadline by which an injured party must seek legal relief. Under the Copyright Act, a copyright claim must be brought within 3 years of accrual. This would appear to mean that a claim for copyright infringement must be brought within 3 years of the date that infringement occurred. However, the courts in Utah, and in many other jurisdictions, have ruled that accrual begins at the date on which the copyright owner knew or should have known that their copyright had been infringed. This approach to the Statute of Limitations is commonly referred to as the “Discovery Rule.”
The application of the Discovery Rule opens up Pandora’s Box for copyright licensees.

For example, a copyright owner might find his or her photograph on a website 10 or 15 years after the website was developed. Even if the website bought a license to begin with, the odds that the website will have access to records of that fact is fairly small.

Making the matter even more complex is the fact that many small businesses use independent designers to create their websites and other materials. The independent designer may be the only one who has access to copyright license information. This provides little help if the designer has moved on and cannot be located.

Furthermore, the license may not be in the name of the business, but may be in the name of the web designer or even the name of an individual at the business. For example, if you asked a friend to create a website for your business, he may have registered the license in your name, the name of your business, his name, or the name of his business. If you get a notice 10 years later from Getty Images, Corbis, or one of the other copyright licensing agencies, you may have a difficult time determining whether you have a license and who holds it.

The availability of the waybackmachine (www.archive.org) simply expands the possibility that old websites will become fertile ground for finding potential copyright infringers years after the allegedly infringing material has been removed.

Just in case you are “discovered” – keep good records.