Introduction to copyright for business


31 Mar
31Mar

Contents

What is copyright?; Subsistence—no requirement to register; Protected works; How Long does copyright last?; Copyright notices; Dealing with copyright in commercial contracts; Assignment of copyright; Licensing copyright; Employment and copyright 

What is copyright?

Copyright recognises the intellectual creation of an author when a work is created. Copyright is, put simply, a right to copy a work (the copyright owner may also restrict acts other than copying).

The law is set out mainly in the Copyright, Designs and Patents Act 1988 (CDPA 1988), which took effect from 1 August 1989. In practice, one work tends to give rise to multiple copyrights. When considering copyright works, rights distinct from copyright, eg design rights should also be considered as they may also apply to creative works.

Subsistence—no requirement to register

In the UK, copyright arises automatically on creation, provided that a work is not copied and is sufficiently original.

‘Originality’ requires that the work is an ‘intellectual creation’.

Following a series of court rulings, an original work is now one which expresses the 'intellectual creation of an author'. Courts no longer use the traditional skill, labour and judgment test. There is no requirement for novelty in the sense that the work must be new in the marketplace. A work need not be unique; separate copyrights may exist in two similar, independently created works.

The subject matter must be expressed in a permanent form such as in writing, in a film, in a broadcast, on a computer or as a recording.

'Expression' is more than a mere recording of a work and is linked to originality. Ideas not reduced to permanent form may be protected by the law of confidence.

Copyright does not subsist in a work unless certain qualification requirements are met. An author's status is important when considering whether a work qualifies for copyright protection. A work must have a qualifying author or if an author does not qualify, qualification for published works may occur through place of first publication. The place of first publication or broadcast must have been the UK or other specified country.

Protected works

Copyright works have been formally categorised in CDPA 1988. Under English law, a work must fit into one of the listed categories in order for copyright to subsist. The categories of copyright works are:

original literary, dramatic, musical and artistic

film, sound recordings and broadcasts

typographical arrangements

Many works benefit from multiple copyright. A cartoon, for example, is likely to have separate copyrights in the dialogue, sketches, graphics, sound recordings and music. Where a cartoon character was originally a character in a book, that book would also attract copyright.

How Long does copyright last?

In the UK, copyright is not registrable so there is no requirement to maintain it, unlike other rights such as trade-mark rights.

UK copyright normally lasts for the life of the author (if joint, the last surviving author) plus 70 years. Specific rules apply to broadcasts, computer-generated works, sound recordings and films.

Three events dictate the commencement of the copyright term for a work: the author's death, the year of making the work or the year of first making the work available to the public.

Copyright notices

Owners of copyright are advised to use copyright notices.

As referred to above, copyright arises automatically if the requirements for its subsistence are met, therefore the posting of a copyright notice is not a legal requirement; nor does it ‘enable’ the right to come into existence.

However, a notice informs other businesses and the public at large that the work is protected by copyright, identifies the copyright owner, and shows the year of first publication. It should be positioned to give reasonable notice of the copyright works.

An example copyright notice is: © Copyright [business name] [year eg 2020]. All rights reserved.

Dealing with copyright in commercial contracts 

Copyright can be treated as an asset of a business and may be exploited in a number of different ways.

It can licensed or transferred by assignment and may be used in multiple ways to generate income for a business.

Assignment of copyright

Copyright in a protected work may be transferred completely or partially in respect of only some selected rights or for only part of the copyright period. An assignment of copyright must be in writing, signed by or on behalf of the assignor, but it does not need to be in agreement form. The assignment may therefore take the form of a letter, signed only by or for the assignor.

However, where the assignment purports to include the future copyright that will or may come into existence in future works or classes of works or when a particular event occurs, the assignment must be in agreement form.

Licensing copyright

Copyright, including the future copyright, in a protected work may be licensed.

The licensor retains ownership of the copyright but grants permission to the licensee to do acts which would otherwise be an infringement of copyright, if not for the licence.

For example, the author of a piece of software may grant a licence to a trading company to use the software in its business. The author may also grant a license to another entity to sub-license it in another territory.

A copyright licence can be exclusive, sole or non-exclusive.

An exclusive licence excludes third parties and the licensor from carrying out the licensed acts, while a non-exclusive licence enables the licensor to continue exploiting the copyright and also grant further licences to third parties.

A sole licence is not defined by CDPA 1988, but is commonly used where the parties intend to permit the licensor and licensee to continue using the copyright, but where no further licences may be granted.

A licence may be partial or complete. A partial licence may be limited to only a few selected rights, or may only relate to part of the copyright period.

 When licensing digital copyright works, the method of delivery of content and whether the licence permits use in a particular format, in all known formats, or in as yet unknown formats are all relevant considerations.

A licence need not be in writing unless it is an exclusive licence, in which case it must be in writing and signed by or on behalf of the copyright owner. It may therefore take the form of a letter.

Employment and copyright

The first owner of the copyright in a literary, dramatic, musical or artistic work or in a film made after 1st July 1994, made by an employee in the course of his employment will be the employer (unless there is agreement to the contrary).

Consideration needs to be given to whether the author was employed under a contract of service when the work was created or alternatively whether the work was commissioned under a contract for services.

If the former applies then what is in the 'course of his employment' and what is not, for an employee, must be examined. Whether there is any agreement to the contrary should also be considered.

The courts use a number factors to assess whether a contract is of service (employees) or for services (contractor). Relevant factors include the level of control the employer has over the employee's work, and whether pay is received for holiday, sickness, pension and how the worker is taxed.

The employee's work will also be looked at to see if it is an integral part of the business. A contractor usually has a lot more say in how he completes work for a company.

The contract of employment and the job description are vital in determining whether the skill, labour and judgment used by the employee in creating the work are part of the employee's duties agreed between him and his employer.

Ownership of copyright should be made clear contractually and job descriptions updated when changes are made to the scope of the employee's duties.

By the publications team at: Contracts-Direct.com with the assistance of the referenced third parties (Lexis Nexis).

Legal Notice:

Publisher: Atkins-Shield Ltd: Company No. 11638521
Registered Office: 71-75, Shelton Street, Covent Garden, London, WC2H 9JQ

Note: This publication does not necessarily deal with every important topic nor cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice. The information contained in this document is intended to be for informational purposes and general interest only.

E&OE

Atkins-Shield Ltd © 2021

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