Category: Copyrights

Copyright Rules Regulations and Frustrations

Copyright Applications

Copyright Applications

This blog is an expansion of BPL’s July 9, 2020 blog on Copyright Registrations in an effort to further help you understand the copyright process.

It Can Be Complex

The process of applying for a Copyright Registration, according to the United States Code, is as follows:

To procure US Copyright Registrations, the creator/owner of the original work(s) of authorship must be fixed in a tangible medium of expression. 17 United States Code 102.

Simplifying The Code

Let’s consider that statement in normal-speak instead of legalese.

  • The “creator/owner” can be self explanatory, as is the “original work.”
  • Depending on circumstances, the creator is not always the owner.
  • “Authorship” means somebody needs to create the original work.
  • The “tangible medium of expression” can be anything from a physical copy of the work, such as a book or a painting, to a digital copy, such as a computer file or an online video.

With that information, you now know that once there’s a copy of the work (tangible medium of expression), you as the creator/owner will need to file a Copyright Application with the Copyright Office to procure a Copyright Registration.

Benefits Of A Copyright Registration

The application must include information about the work, such as the title, the author, and the date of creation. Once the application is filed, the Copyright Office may issue a Copyright Registration. They usually do, but not always. Also, Copyright Registration is not required to secure a Copyright, but it does provide a number of benefits, including the ability to sue in federal court for Copyright infringement and statutory damages.

Selecting The Correct Copyright Application Form May Not Be Straight Forward

You didn’t expect anything at the Copyright Office to be simple or easy did you? There are different types of authorships which  require different Copyright Office paper forms or digital portals.

Principal Categories of Copyright Applications

  • Literary Works
  • Performing Arts
  • Visual Arts
  • Motion Pictures
  • Digital Works not otherwise categorized
  • Photographs

Copyright Office Forms/Digital Portals

Literary Works (Fiction, Non-Fiction, Poetry, Articles, Periodicals)

  • Literary Work (Form TX)
  • Serial Publications (Form SE)
  • Form CON

Performing Arts (Music, Lyrics, Sound Records, Scripts, Stage Plays)

  • Works of the Performing Arts (Form PA)
  • Sound Recordings (Form SR)
  • Form CON

Visual Arts (Artwork, Illustrations, Jewelry, Fabric, Architecture)

  • Visual Arts Work (Form VA)
  • Form CON

Motion Pictures (Movies, TV Shows, Video Games, Animation, Videos)

  • Works of the Performing Arts (Form PA)
  • Form CON

Group Copyright Applications

1. Group Registration for Works on an Album of Music (GRAM) –

Group Registration of musical works, recordings, photos, artwork and liner notes that are published on the same album

2. Group Registration of Short Online Literary Works (GRTX) –

  • Digital Works not otherwise categorized (Computer Programs, Databases, Blogs, Websites)
  • Group Registration of Published Photographs
  • Group Registration of Short Online Literary Works

3. Group Registration of Unpublished Works (GRUW) –

  • Photographs (News Photographs, Selfies, Wedding Photographs, Family Photographs)
  • Photographic Databases

If you want to secure a copyright on your original works and need assistance filing your Copyright Applications, contact BPL we would be happy to handle this task for you.

Ask Us Anything… about Intellectual Property!

If you or your business are located in the greater Cincinnati, Indianapolis, Lexington, or Louisville standard metropolitan statistical areas and have a topic or question you would like us to address in the blog, please send us an email.

We provide intellectual property and business counsel for businesses and companies.  If you need assistance, please contact Business Patent Law, PLLC.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

Mask Mark Protection

What are Mask Works?

Mask Works are a type of intellectual property created by the Semiconductor Chip Protection Act (SCPA) of 1984.

Statutory Mask Works rights are set forth in Title 17 United States Code §§ 901-914. In general, the SCPA allows for the protection of the combination of a mask and a semiconductor chip.

Some Requirements for and Rights associated with Intellectual Property Protection of Mask Works

  • A mask work must be a series of related images, however fixed or encoded (1) that have or represent the predetermined three dimensional pattern of metallic, insulating, or semiconductor material present or removed from the layers of a semiconductor chip product; and (2) in which series the relation of the images to one another is that each image has the pattern of the surface of one form of the semiconductor chip product.
  • A semiconductor chip product is defined as the final or intermediate form of any product (1) intended to perform electronic circuitry functions and (2) having two or more layers of metallic, insulating, or semiconductor material, deposited or otherwise placed on or etched away or otherwise removed from a piece of semiconductor material in accordance with a predetermined pattern.
  • The Registration of the Mask Work is effective on the date of the Registration or the date the Mask Work is first commercially exploited anywhere in the world by an owner as defined in 17 United States Code § 902.
  • A Registration of the Mask Work is effective for ten years. However, to secure protection of the Mask for the entire 10-year term, the owner must register the work with the Copyright Office within two years of the date on which the Mask work is first commercially exploited or the potential protection will be lost.
  • 17 United States Code § 905 reads, “The owner of a Mask Work provided protection under this chapter has the exclusive rights to do and to authorize any of the following: (1) to reproduce the Mask Work by optical, electronic, or any other means; (2) to import or distribute a semiconductor chip product in which the Mask Work is embodied; and (3) to induce or knowingly to cause another person to do any of the acts described in paragraphs (1) and (2).”

Limitations of Owner’s Rights

  • Protection is not available for a Mask Work that is not original or consists of designs that are staple, commonplace, or familiar in the semiconductor industry, or variations of such designs, combined in a way that, considered as a whole, is not original.
  • It is not an infringement of the exclusive rights of the owner of a Mask Work for— (1) a person to reproduce the Mask Work solely for the purpose of teaching, analyzing, or evaluating the concepts or techniques embodied in the Mask Work or the circuitry, logic flow, or organization of components used in the Mask Work; or (2) a person who performs the analysis or evaluation described in paragraph (1) to incorporate the results of such conduct in an original Mask Work which is made to be distributed. 17 United States Code § 906.
  • An innocent purchaser of an infringing semiconductor chip product — (1) shall incur no liability under this chapter with respect to the importation or distribution of units of the infringing semiconductor chip product that occurs before the innocent purchaser has notice of protection with respect to the Mask Work embodied in the semiconductor chip product and (2) shall be liable only for a reasonable royalty on each unit of the infringing semi­conductor chip product that the innocent purchaser imports or distributes after having notice of protection with respect to the Mask Work embodied in the semiconductor chip product. 17 United States Code § 907.

Mask Work Notice

  • The notice shall consist of— “(1) the words “Mask Work”, the symbol *M*, or the symbol Ⓜ (the letter M in a circle); and (2) the name of the owner or owners of the Mask Work or an abbreviation by which the name is recognized or is generally known.” 17 United States Code § 909.

If your company needs assistance with registration of Mask Works, please contact BPL.

If you or your business are located in the greater Cincinnati, Indianapolis, Lexington, or Louisville standard metropolitan statistical areas and you have a topic or question for Business Patent Law, PLLC to address in the blog, please send us an email.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.  If you need assistance, please contact Business Patent Law, PLLC.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

capital gains on patents

Capital Gains – Intellectual Properties  

Capital Gains May Be Available For The Transfer Of Intellectual Property Rights

A capital gains tax rate for the transfer of Intellectual Property is available if the transfer of Intellectual Property rights is carefully planned.

Patent Rights are not Accorded Capital Gains Status – Unless…

26 I.R.C. 1221 – Capital Asset, in part, reads:

(a)    In General

For purposes of this subtitle, the term “capital asset” means property held by the taxpayer (whether or not connected with his trade or business), but does not include –

…(3) a patent, invention, model or design (whether or not patented), a secret formula or process, a copyright, a literary, a musical/artistic composition, a letter or memorandum, or similar property, held by—

                    (A)    a taxpayer whose personal efforts created such property,

                    (B)    in the case of a letter, memorandum, or similar property, a taxpayer for whom such property was prepared or produced, or

                    (C)    a taxpayer in whose hands the basis of such property is determined, for purposes of determining gain from a sale or exchange, in whole or part by reference to the basis of such property in the hands of a taxpayer described in subparagraph (A) or (B)

Situation 1 – Patent Capital Asset

Joe was the founder of his company JoeCo. Over the years, Joe was the inventor of several Patents for the products sold by JoeCo. After 40 years in business, Joe was seeking buyers for JoeCo. AcquireCo purchased JoeCo and all assets and liabilities.

Joe can treat this transfer of Patent rights as a capital asset because the U.S. Internal Revenue code also includes 26 I.R.C. 1235. When specific facts exist, the inventor’s Patents are capital assets taxed as capital gains.

26 I.R.C. 1235 – Sale or Exchange of Patent, in part, reads:

(a)    General    A transfer (other than by gift, inheritance, or devise) of property consisting of all substantial rights to a patent, or an undivided interest therein which includes a part of all such rights, by any holder shall be considered the sale or exchange of a capital asset held for more than 1 year, regardless of whether or not payments in consideration of such transfer are—

                     (1)     payable periodically over a period generally coterminous with the transferee’s use of the patent, or

                     (2)    contingent on the productivity, use, or disposition of the property transferred.

(b)    “Holder” defined For purposes of this section, the term “holder” means—

                    (1)     any individual whose efforts created such property, or

                    (2)    any other individual who has acquired his interest in such property in exchange for consideration in money or money’s worth paid to such creator prior to actual reduction to practice of the invention covered by the patent, if such individual is neither—

                    (A)    the employer of such creator, nor

                    (B)    related to such creator (within the meaning of subsection (c)).

Situation 2 – Intellectual Property Gains

Jill was a seamstress with talent for making and selling clothing designs that generated a comfortable living for her family. Jill was a sole proprietor and over the years received two Trademark Registrations for Jill’sThings®. After 40 years, Jill sold her business to AcquiringJack, LLC with a knack for scaling small businesses. 26 I.R.C. 1221 does not prevent Jill’sThings® from being classified as capital assets. Therefore, the sale of Jill’sThings® would be treated as capital gains.

Situation 3 – Patent Capital Asset

AcquiringJack, LLC purchased all rights associated with two JoeCo Patents previously sold to a third party. AcquiringJack LLC held the JoeCo Patents for 18 months and sold the JoeCo Patents to LastMinuteCharlie, Inc. AcquiringJack, LLC’s sale of the JoeCo Patents will be treated as capital gains.

Situation 4 – No Capital Gains

Second Fiddle was an individual who was a skilled guitarist and sufficiently talented to write original music. Over the years, Second Fiddle had received Copyright Registrations for some of his musical compositions. While on a regional tour with his band, the Fiddlers, a vice president of Big Break Inc. made Second Fiddle an offer he could not turn down for his Copyright Registrations.  Second Fiddle sold his Copyright Registrations to Big Break Inc. According to 26 I.R.C. 1221, a Copyright or musical score held by the creator is not a capital asset. Second Fiddle’s sale was taxed as ordinary income.

Situation 5 – Intellectual Property Capital Gains

Philharmonic Violin was an individual who played third violin with the orchestra. Although not as musically skilled as some other violinists in the orchestra, Philharmonic Violin wrote a few concertos and was granted some Copyrights for her efforts. Philharmonic Violin assigned her Copyrights to her company, Concertos LLC. On her lucky day, Philharmonic Violin arrived early for practice and was playing some of the supporting violin portions of her concertos. Big Director, the CEO of his production company, heard the portions of Philharmonic Violin’s concertos and told Philharmonic Violin that they were perfect for the score of one of his films. On that day, Big Director wrote a check payable to Concertos LLC. Because Concertos LLC rather than Philharmonic Violin received the payment, the payment will be taxed as a capital asset.

Business Patent Law, PLLC does not provide tax counsel. The above situations are only illustrative. Changes in the facts of a taxable situation can generate different applications of Title 26 Internal Revenue Code. Advance planning for taxable situations can reduce the amount of taxes paid. For tax advice, please contact your tax advisor.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.  If you need assistance, please contact Business Patent Law, PLLC.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

The Copyright Bundle (17 U.S.C. §106) of Exclusive Rights includes: The right to reproduce the copyrighted work in copies or phonorecords The right to prepare derivative works based upon the copyrighted work The right to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending In the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly In the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly In the case of sound recording, to perform the copyrighted work publicly by means of a digital audio transmission

Copyright Bundle

Sometimes people in the musical or performing arts make reference to a Copyright Bundle.  Copyright Registrations can enhance the “litigation teeth” associated with a Copyright Bundle.

What is a Copyright Bundle?

The Copyright Bundle (17 U.S.C. §106) of Exclusive Rights includes:

  • The right to reproduce the copyrighted work in copies or phonorecords
  • The right to prepare derivative works based upon the copyrighted work
  • The right to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending
  • In the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly
  • In the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly
  • In the case of sound recording, to perform the copyrighted work publicly by means of a digital audio transmission

Our Situation: Will our Copyright Bundle help us?

Our Louisville, Kentucky musical group has a Copyright Registration for the musical score and lyrics of our signature song.

When in Lexington, Kentucky, we stopped at one of Lexington’s music spots to enjoy the local music.  Although one of the Lexington groups made some changes to the lyrics of our signature song, they did not miss a beat of our copyrighted score.

The group did not have permission to use our signature song and the Lexington musical spot charged admission for us to enter the premises.

General Observations

Based on the above scenario, unless the Lexington group and Lexington music spot could prove a fair use defense, the Louisville group has a valid claim for Copyright infringement.

If you have questions about your Copyrights, please contact Business Patent Law, PLLC.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.  If you need assistance, please contact Business Patent Law, PLLC.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

Copyright Infringement - Statutory Damages

Statutory Damages – Copyright Infringement

When Are Potential Statutory Damages available?

  • Situation #1 – Our company filed the Copyright Application within seven days after the work was finished. The Copyright Registration was granted eleven months after filing the Copyright Application. One year after filing of the Application, we notified a potential infringer of alleged infringement and our intention to seek statutory damages (among other things) unless the infringement ceased immediately. If infringement is proved, statutory damages available to Copyright owner.
  • Situation #2 – The family business published the finished work in September. We filed the Copyright Application in November. In June of the next year, the Copyright Office granted our registration. In July, our sales people reported that our competitor had copied our published work. If infringement is proved, statutory damages available to Copyright owner.
  • Situation #3 – Jimmy the artist published his finished work in January. In April, Jimmy filed the Copyright Application with the Copyright Office. In August, Jimmy learned that his brother, Billy, was using Jimmy’s finished work without permission and that Billy had been paid thousands of dollars by Harry’s Place to use the finished work. Harry believed the work to be Billy’s work.  The Copyright Office granted Jimmy’s Copyright Registration in December. Harry Place’s commenced publishing Jimmy’s finished work one year after the work was completed. Statutory damages are not available against Billy. If infringement is proved, statutory damages are available to Jimmy for Harry’s Place’s infringement.

What the Law Says About Statutory Infringement & Damages

The Basic Parameters for Copyright Infringement Statutory Damages are set forth in 17 United States Code (U.S.C.) 504

17 U.S.C. 504, in part, reads:

(a) In General.—Except as otherwise provided by this title, an infringer of copyright is liable for either—

(1) the copyright owner’s actual damages and any additional profits of the infringer, as provided by subsection (b); or

(2) statutory damages, as provided by subsection (c).

(c) Statutory Damages.—

(1) Except as provided by clause (2) of this subsection, the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $750 or more than $30,000 as the court considers just. For the purposes of this subsection, all the parts of a compilation or derivative work constitute one work.

(2) In a case where the copyright owner sustains the burden of proving, and the court finds, that infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000. In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200. The court shall remit statutory damages in any case where an infringer believed and had reasonable grounds for believing that his or her use of the copyrighted work was a fair use under section 107…

US Supreme Court Ruling: When is Copyright Registration Made?

In the Supreme Court case of Fourth Estate Public Benefit Corp. v Wall-Street.Com, LLC, (2019) the Supreme Court held “…registration . . . has been made” within the meaning of 17 U. S. C. §411(a) not when an application for registration is filed, but when the Registrar has registered a copyright after examining a properly filed application.”

As a practical matter, it may take nine or more months subsequent to the filing of an Application for Copyright Registration before the Registration is granted by the Copyright Office.

Limitations for Statutory Damages

As a general rule, 15 U.S.C. 412 limits the Copyright owner’s statutory damages remedies to an owner having an effective date of registration not later than three months subsequent to first publication or one month after the owner learned of the infringement.

Still Have Questions About Statutory Infringement and/or Damages?

If your enterprise needs legal assistance procuring/managing/enforcing your Patent Applications, Patents, Copyrights or Trademarks/Service Marks, please contact Business Patent Law, PLLC.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

Copyright Registrations and Copyright Protections

Copyright Registrations

What are Copyright Registrations?

Copyright Registrations are defined in Title 17 of the United States Code (U.S.C). In part, 17 U.S.C. 102 reads:

“(a) Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device….

 

Works of authorship include the following categories:

      • literary works
      • musical works, including any accompanying words
      • dramatic works, including any accompanying music
      • pantomimes and choreographic works
      • pictorial, graphic, and sculptural works
      • motion pictures and other audiovisual works
      • sound recordings
      • architectural works”

A Competitor Published our Copyright – What can We do?

Our advertising manager had lunch with a competitor’s public relations manager. Unfortunately, over lunch, our advertising manager discussed the focus of our advertising campaign. He also discussed our new audiovisual commercial for our third most profitable product line. Before we could publish our new commercial, our competitor launched its own commercial. Their commercial included every focus point from our advertising campaign.

According to our accounting estimates, their use of our ideas reduced our sales by $500K. Can we sue our Competitor for Copyright Infringement?

The answer is… it depends.

What is Required to Prove Copyright Infringement?

Among other things, a Copyright Registration requires, a work “…of authorship fixed in any tangible medium of expression…”

  • If your company had filed an Application for Copyright Registration, prior to the advertising manager’s disclosure to the public relations manager, then Yes, you can probably prove copyright infringement. (The work of authorship was fixed in a tangible medium of expression.)
  • If your company can provide a written document, audio recording or audiovisual recording of what the advertising manager disclosed to the public relations manager then Yes. It may be worthwhile to pursue a claim of copyright infringement, since “the work of authorship was fixed in a tangible medium of expression.”
  • If your company relies only on oral testimony of the advertising manager to prove existence of a Copyright then No. The likelihood of a successful suit is very low since the focus concept was an idea and not “a work of authorship fixed in a tangible medium of expression.”

Advantages of Copyright Registrations

  • Evidence of ownership of the registered work of authorship
  • Public notice of ownership of the work
  • Federal District Court jurisdiction for an infringement suit
  • Possibility of statutory damages and attorneys’ fees

If your enterprise needs legal assistance procuring, managing and enforcing your Copyrights, please contact Business Patent Law, PLLC.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.