Invention Law: The Hughes Law Firm

Relevant Law
A basic revision in the U.S. copyright laws came into effect on January l, l978. Prior to that time, copyright protection was a combination of state and federal law. However, the l978 law obliterated the old "common-law copyright" and the copyright is now protected only under the federal law. Also the new concept of an "automatic copyright" was introduced. As soon as any work subject to protection of the copyright laws is created (i.e. fixed in any tangible form, such as in writing, recording, sculpture, painting, a holoform, etc.) copyright protection automatically attaches. In other words, you have the protection of the federal copyright law whether you know it or not. The principle of "automatic copyright" was one of the most fundamental changes made by the l978 law.

A second basic change was made in the revision of the law that became effective on March l, l989, which eliminated the requirement of the copyright notice on the published work. One of the reasons for enacting the law which became effective on March l, l989 was to place U.S. law more into conformity with the Berne Convention

There is a misconception that copyright law is of importance only to businesses engaged in publishing, recording, film making, television, or the like. However, it is almost impossible for any business to exist without producing some sort of copyrightable material. It is often overlooked that copyright protection extends to business documents, such as directories, manuals, instruction sheets, specifications, advertising, labels for products, etc. Further, engineering and scientific works, such as drawings, schematics, tabulated or complied facts, etc. can be protected. It is now well established that computer program and automated databases are included as copyrightable subject matter. (See Question No. 4 in Chapter 2, for a further compilation of things subject to copyright protection.)

Term of the Copyright
Prior to l978, the term of a copyright in the U.S. was for 28 years, and this could be renewed for an additional 28 years. As of January l, l978, the term of a copyright is for the life of the author plus a 50 year period after the author’s death. Where there is co-authorship, the term continues for the life of the last surviving author, plus 50 years after the last surviving author’s death.

When the author is not known or the copyrighted work is a "work made for hire", the term of the copyright is 75 years from the date of first publication, or l00 years from the year of creation, whichever expires first.

For those works which were created or published prior to January l, l978, but with the copyright still in effect after January l, l978, the situation is somewhat more complex, and only a few of the more common situations will be discussed in this text.

EXAMPLE: If a work was published prior to January l, l978 and the first 28 year term is still in effect after that date, then the copyright could be renewed for a subsequent term of 47 years. The application for such renewal and extension of the copyright must be made in the U.S. Copyright Office within one year prior to the expiration of the original term of the copyright. For those copyrights that were already in their renewal terms before December 3l, l977 and in effect after that date, the duration of the copyright is extended to a term ending 75 years from the date the copyright was originally secured under the prior law.

How Copyright Protection is Obtained
As indicated above, for all works created on or after January l, l978, the copyright protection is automatically extended to the work as soon as it is placed in any tangible form. Thus, in many instances a person will have copyright protection and not even be aware of it. For example, even a letter written to a friend, notes taken in attending class, or a home video of a child’s birthday party are all automatically protected under the federal copyright law. Further, as of March l, l989, publication without the copyright notice will not destroy the copyright.

Registering the Copyright
Registration is not mandatory to maintain the copyright. However, it is necessary that the copyright be registered in the U.S. Copyright Office as a condition for enforcing the copyright in the courts. Registering the copyright does not involve the time and complexities of a patent application, but there can be problems requiring careful legal consideration.

The copyright can be registered either before or after publication of the work. As indicated above, registration is "permissive", in that it is not a requirement to maintain the copyright. However, there are a number of strong "inducements" or "benefits" to registering the copyright. Some of the more significant ones are given in the following section.

The usual form of the copyright notice is "C" in a circle, along with the year of publication and the name of the owner, such as:

Also, the word "copyright" can be used in place of the "C" in a circle. The symbol "P" within a circle is used in connection with sound recordings.

With regard to the requirement to apply the notice to the published work, this depends on the date of publication.

Thus, copyright infringement is different than with patents or trademarks, where infringement can occur with no knowledge of (or access to) information of the patent or trademark rights of another.

EXAMPLE: In l990, Doris Digital creates a computer program to assess dietary requirements, count the calories, and prescribe a menu for meals. In l99l, Sam Spreadsheet independently creates a very similar program, but without any knowledge of (or access to) Doris’ program. Sam is not infringing Doris’ copyright. Further, both Sam and Doris would have quite valid copyrights of their own and each would have a right to stop others from copying his or her program. However, if Doris obtained a patent on her computer program, then Sam’s later independent creation of the computer program would be no defense against patent infringement, if it came within the scope of the claims of Doris’ patent.

Infringement occurs when someone else exercises one of the rights reserved for the copyright owner without permission of the owner. These rights of the copyright owner are:

Fair Use as an Exception
One of the major exceptions to the exclusive rights of the copyright owner is the doctrine of "Fair Use". It is difficult to define this precisely, and it can be considered as copying to a small extent, for a non-commercial purpose, without significantly diminishing the commercial benefit to be derived from the copyright by the owner. Also quoting from a copyrighted work as part of a critique would usually be permissible.

Other Exceptions
There are numerous exceptions to the copyright owner’s exclusive rights. For example, face to face teaching activities, instructional broadcasting, religious services, and other non-profit purposes are excepted, but with certain limitations.

Also, there are certain compulsory licenses that are available under the Copyright Act. For example, the compulsory license provisions authorize the making of phonograph records and audio tapes of musical works, subject to certain conditions, and the payment of the royalty fee. There are other license provisions relative to juke boxes, broadcast television programs, and performance of musical works and exhibitions of artistic works by public broadcasting stations.

COMMENT ON THE "TROUBLE I DON’T NEED" CATEGORY: All too frequently a person gets first exposure to copyright infringement when a representative of ASCAP or BMI (the two main entities that grant licenses for musical performances) visits a place of business that has music played (either live or recorded) and asks for payment of an annual license fee. Don’t accuse the person of being a member of the Mafia and throw him out. After the second or third encounter you will likely get sued. A number of years ago one neighborhood cocktail lounge with which I was personally familiar was fined $9,000 for one night’s performance (i.e. $l000 for each of eight songs in the ASCAP repertoire that were played on that particular evening and also $l000 attorney’s fees).

Distinguishing Between the Expression as Opposed to the General Underlying Idea
In determining whether there is an infringement, it is necessary to understand that the copyright protects the "mode of expression", as opposed to protecting the underlying concept expressed.

EXAMPLE: Martin published a pamphlet describing a sequence of steps in building a bookshelf, and also providing illustrations on how to build the bookshelf. This is used as a hand-out in Martin’s lumber supply store. Thompson followed the instructions in one of the pamphlets as a guide to manufacture and sell hundreds of such bookshelves commercially. This is not an infringement of Martin’s copyright. Further, Thompson could likely sell the component parts of the bookshelf in a package and prepare his own descriptive booklet on how to assemble the shelf, and this could be done (provided he used his own illustrations and wording) without infringement of Martin’s copyright.

CAUTION - However, it is often difficult to distinguish between what is the "underlying idea" and the "expression", particularly with regard to such things as computer programs, story sequences, etc. Further Thompson might be liable on other grounds, for example, if he were somehow involved in acts of unfair competition, such as trading on Martin’s reputation or goodwill.

EXAMPLE 2: If Shakespeare had a copyright on his play "Romeo and Juliet" in the l950’s, then the musical play "West Side Story" quite possibly would have been considered a copyright infringement, because of the similarity of the sequence of events that make up the story.

Ownership by the Author
Absent some other arrangement, the ownership of a copyright will normally vest in the person or persons who created the work.

Works Made for Hire
If an employee produces a copyrighted work within the scope of that employee’s employment activities, the work may be considered to be made "for hire". In this situation, the employer is considered to be the "author", and absent any agreement to the contrary, the employer is considered to be the owner of the copyright in the work.

PRACTICAL ADVICE: The current case law does not interpret the definition of "employee" very broadly relative to what is a "work made for hire". If the work is performed, for example, by someone who is away from the employer’s premises, and working on his own time schedule, the work may well not be considered a "work for hire", and the copyright would belong to the person who created the work. If there is any doubt about whether the creator of the work is truly an "employee" within the meaning of the Copyright Act, then this should be covered by written agreement.

FURTHER PRACTICAL ADVICE: For a specially commissioned work (e.g. a work prepared for you by an independent advertising agency or possibly by an independent photographer, or artist), you should consider having a written agreement that you are the owner of the copyright, so that you would be in a position to enforce your copyright against an infringer (e.g. one of your competitors who is copying your catalog or advertising layouts), and also be free to use the work in other circumstances without a claim for copyright infringement by the person who created the work.

CAUTION - SUB-CONTRACTING WORK ON COMPUTER PROGRAMS. It is not uncommon for a company developing a computer program to sub-contract some of the work, and there may be a second tier of sub-contractors as this work is further farmed out to individual computer programmers. If proper agreements are not in place, an individual working on the program who is not an employee may end up having certain ownership rights in the copyright. This should be covered by agreements requiring assignment of copyright, signed by every company or person working in developing the program. The problem may not come to light until it comes time to register the copyright when it becomes necessary to untangle the chain of ownership.

Distinguishing the Copyright from the Material Object
When the copyrighted work is embodied in a material object (e.g. a book or a painting), the copyright as a property right is distinct from ownership of the object itself. The person who pays for the work may own just the physical embodiment of the work for which he paid, but not the underlying copyright.

EXAMPLE l: A painter sells his painting to another, but does not sell the copyright. The person who purchases the painting would not have the right to make copies.
EXAMPLE 2: An architect prepares a set of house plans for an individual building a home, but the architect retains ownership of the underlying copyright. It may be permissible to have copies made for subcontractors, working on that individual’s home, but if copies are made to build a series of homes, without the architect’s permission, it would likely infringe the copyright of the architect. If this further use of the drawings is intended, this should be bargained for at the time of entering into the agreement with the architect.

CAUTION - In December, l990 the law was changed so that the building itself is now included in copyrightable subject matter, in addition to the architectural drawings or plans.

Joint Ownership Problems
Joint ownership may result from two authors contributing to the same work where the intention is that their separate contributions be merged into a "unitary whole". Also, joint ownership may result from the transfer of ownership.

CAUTION - One joint owner of the copyright may generally exploit or license use of the entire work without the consent of the other co-owners. However, this is less severe than the corresponding provisions of the patent law dealing with joint ownership, since at least there is the duty to account for profits derived from the copyright.

EXAMPLE: Doris and Sam collaborate in producing their computer program in prescribing menus of food to match certain dietary requirements. They have no agreement between them specifying how they should treat the copyright. Sam loses interest in the project, and Doris finds a prospective licensee who wants to market the computer program. However, this licensee wants exclusive rights in the copyright. Sam won’t go along with it, and the prospective licensee, recognizing that Sam could license others to produce the same computer program, backs out.

ANALYSIS: As with any co-ownership or joint development situation in projects involving any intellectual property, there should be a written agreement taking care of such contingencies. (See Chapter 3 for further discussion of this problem relative to patents.)

Assignment
The copyright is "divisible", and all or a portion of the author’s exclusive rights may be transferred to others.

Licenses can be granted under the copyright law, and these can be exclusive or non-exclusive. As with an assignment, the license can be limited to grant rights for only a portion of the copyright.

Recording Requirements
An assignment or exclusive license of the entire copyright should be recorded in the U.S. Copyright Office.

Termination
Sections 203 and 304 (c) of the Copyright Act provide that authors or certain others successors at particular times and under strict conditions and procedures may terminate an assignment or license of the copyright.

Most countries of the world give copyright protection for both residents and non-residents of that country. Also, in the U.S., copyright protection is afforded to foreign nationals. There are international conventions (or treaties) between most of the nations of the world dealing with copyrights. A detailed review of this is beyond the scope of this text.

Since people will most often rely, at least in part, upon copyright protection for computer programs, this subject is being discussed in this section on copyrights. However, it should be remembered that computer programs can also be protected under the law of patents and trade secrets, and quite commonly trademarks are applied to computer programs. Accordingly, when a computer program is involved, all four areas of intellectual property law should be considered. In addition, some special considerations will be presented later in this Chapter on copyrights.

Copyright Protection
As indicated previously, as soon as the computer program is embodied in any tangible form (e.g. written out or recorded), copyright protection automatically attaches, whether the person originating the program knows it or not. In most instances, if the computer program has any value, the owner will want to register the copyright. As a practical matter, the registration can be accomplished without giving up significant proprietary information about the computer program.

Patent Protection
The development of the law in recent years has made it fairly clear that in most instances patent protection is available for a computer program, provided it meets the standards of "unobviousness." However, the filing and prosecution of the patent application is a much more expensive, prolonged and complex process in comparison with registering the copyright. Nevertheless, there is a sharply increasing trend to seek patent protection on the computer program (usually in addition to taking advantage of copyright protection). With an increasing influx of patent applications on computer programs deluging the U.S. Patent and Trademark Office in recent years, there are unusual difficulties in performing an adequate patentability search on a computer program. Further, there are significant uncertainties concerning the risk of infringement, because (i) a substantial number of patent applications on a related computer program may still be pending in the U.S. Patent & Trademark Office, and hence unavailable for inspection, and (ii) difficulties in searching those patents that have already issued.

Trade Secret Protection
A computer program can also be protected as a trade secret, simply by taking the proper precautions of preserving its secrecy. Trade secret protection is compatible with copyright protection, but not compatible with patent protection. (However, see the EXCEPTIONS following.) The reason for this is that in order to obtain a valid patent, it is necessary to make a complete disclosure of the invention which is sufficiently detailed so that one of ordinary skill in the art could practice the invention. This would automatically destroy the trade secret protection at such time as a patent issues.

EXCEPTION: However, a patent application could be filed, and during the pendency of the application, the computer program could be kept as a trade secret, since the U.S. patent application is not open to public inspection. If it turns out that patent protection is not available (or if only quite limited patent protection is available), the patent application could be permitted to go abandoned so that it is not available to the public, and the trade secret could remain intact.

CAUTION: Foreign patent applications are usually published eighteen months after the earliest effective filing date, and this could destroy trade secret protection.

Agreements Regarding Computer Contracts
In addition to encountering most of the special problems that occur in intellectual property contracts and commercial contracts in general, computer related contracts add a few additional wrinkles - mainly because of peculiarities of the basic nature of computer programs. For example, it is difficult to define with precision the functions which the computer program is intended to accomplish. Further, there will almost always be later "debugging", etc., and substantial follow-up support service may be required. A further discussion of this subject is beyond the scope of this book. There are available a number of legal treatises (some being multi-volume works) on computer related agreements.

This was signed into law in l984, and it’s a form of intellectual property protection that resembles the copyright in some respects. The subject matter protected under this act is a "mask work" that pertains to the design and layout of semi-conductor chips. Further discussion of this is beyond the scope of this text.