Copyright Issues for the Workplace

This article is based on a Business Law student's query regarding a particular workplace issue.

Question: I work as network technician at a local manufacturing company. The vice president of the company sent us some scanned articles that he copied from different magazines he personally reads. Now, he would like us to post the articles on our company intranet site for our staff to read. My boss is unsure whether this is a violation of copyright law because the subscription is personal to our VP and not in our company’s name. Are we allowed to post the VP’s articles to the company intranet without violating any copyright laws?

This scenario arises frequently with the increased emphasis on blogs, intranets, and other networking portals. Other common scenarios in the workplace where this type of copyright issue may also arise include:

▪ making 150 photocopies of an article for an in-house seminar,
▪ scanning a photograph to post on a company intranet,
▪ distributing 20 copies of an article for discussion purposes.

Answer: The general rule is that without the copyright owner’s permission, the act of copying or publicly displaying, posting, or distributing copyrighted materials is copyright infringement. The first place to look would be the terms of any license agreement or the applicable terms and conditions posted online at the copyright holder's website. Thus, one needs permission (a license) from the copyright holder to make commercial (non-academic) use of the material.

It is important to note that mere ownership or possession of a book, magazine, or article does not give the owner or possessor the copyright to the work. The law provides that transfer of ownership of any material object that embodies a protected work does not, of itself, convey any rights in the copyright. Moreover, including attribution on a copied work (for example, citing to the author) will not relieve you from a copyright infringement claim. If the work is protected by copyright, you must obtain permission from the copyright holder to reuse it.

In many instances, the copyright owner will require that the purchaser or user agree to contractual terms that forbid most other uses of the copyrighted work—including “not posting an article to any Internet or intranet site not maintained by the licensee.”

So in this case of the magazine articles, if the license for the magazine articles is for personal usage, then it is likely that posting the magazine articles to the company intranet is a violation of the copyright holder’s rights. Now, if the company was the licensee (perhaps paying business subscription fees), then fair use of the magazine articles may well include posting them to the company intranet for company employees (not customers or general public) to read.

Note: It is important that all companies prepare a plain English, written permissions procedure. It can help educate your employees and also help prevent unauthorized uses of copyright-protected works in your business.

The question then arises when exactly does one need to get permission (and make payment) to reprint (publish or post) a legally licensed, copyrighted work for commercial purposes?

Copyright law is not always clear. There are many gray areas. One of these gray areas is the doctrine of “fair use.” “Fair use” recognizes that certain types of use of other people's copyright protected works do not require the copyright holder's authorization. In these instances, it is presumed the use is minimal enough that it does not interfere with the copyright holder's exclusive rights to reproduce and otherwise reuse the work.

The “fair use” doctrine, codified by the Copyright Act of 1976 as 17 U.S.C. Section 107, does not clearly define “fair use,” but instead gives four non-exclusive factors to consider in a “fair use” analysis. Those factors are:

1. The purpose and character of your use (commercial vs. non-profit, educational use). If a particular usage is competitive with the copyright holder or intended to derive financial or other business-related benefits from the copyright material, then that is probably not fair use.

2. The nature of the copyrighted work . Use of a purely factual work is more likely to be considered fair use than use of someone's creative work.

3. How much material was taken compared to the entire work of which the material was a part? There are no set page counts or percentages that define the boundaries of fair use, but 400 words has been cited by many as the accepted boundary.

4. the effect of the use upon the potential market for or value of the copyrighted work.
This factor looks at whether the nature of the use competes with or diminishes the potential market for the form of use that the copyright holder is already employing, or can reasonably be expected soon to employ, in order to make money for itself through licensing.

The act of photocopying copyrighted work is commonly included in any license provided by copyright holders. Thus, photocopying for use in a business environment is not likely to be considered a “fair use” of the work.

“Fair use” is primarily designed to allow the use of the copyright protected work for commentary, parody, news reporting, research and education. Thus, the statute permits limited use of copyrighted material for academic purposes. In other words, a student can include a small portion of copyrighted material as part of an academic paper, as long as the finished paper is not going to be reproduced and distributed. However, “fair use” does NOT extend beyond the academic realm into business and commercial uses. Uses motivated primarily by a desire for a commercial gain are less likely to be “fair use” of the copyrighted work. For instance, a business cannot extract copyrighted materials under the fair use doctrine to market its products or services. If a business wants to make use of copyrighted material, that business must obtain prior, written approval from the copyright owner for such use of copyrighted materials.

Examples of “fair use” include:

• quotation of excerpts or short passages in a scholarly or technical work for illustration or clarification of the author's observations

• use in a parody of short portions of the work itself

• summary of an magazine article, which may include quotations of short passages of the copyrighted work

While the factors above are helpful guides, they do not clearly identify uses that are or are not fair use. Fair use is not a straightforward concept, therefore, the fair use analysis must be conducted on a case-by-case basis.

Understanding the scope of “fair use” and building a familiarity with those situations where it applies can help protect you and your organization from unauthorized use of copyright materials. There is one way to insure compliance with copyright laws--"when in doubt, obtain permission."