28 May 2015 15:30 IST

What first-time entrepreneurs need to know about copyright

In the age of the internet, a basic understanding of copyright law is desirable, if not downright necessary

Let's begin by assuming you're running a business right after graduating (or while in college?). It's an online technology business, with great potential, amazing features and a great website. You don't have a marketing budget, but who needs one in the beginning anyway, when you have the power of social media, right?

All young entrepreneurs find themselves in a position very similar to the one above. But the vast majority of them will not know of or will outright ignore the Copyright law, even though they should be using it to protect their work and also be aware of infringing copyright that does not belong to them.

So let's first study the basics, before looking at why entrepreneurs should take copyright law seriously:

What is a Copyright?

Copyright is a legal right granted to the creator of any original literary (books, scripts, even software) and audio-visual (music, photographs, movies) works the very moment it is created. So, if you've written an article or built a website, you can have © followed by your name and 'All rights reserved'.

So what is Copyright Registration, then?

Strictly speaking, there's no need to register a copyright. But many businesses do because you can't file a case against any infringement if you haven't registered the copyright in the first place. Once registered, which is easy to do, your legal rights are easy to establish.

Is such a right transferable?

Yes, such rights are transferable to other parties, either temporarily (through a licensing agreement) or permanently (through an assignment deed).

You now know enough to understand how Copyright law affects an entrepreneur. So let's get back to your hypothetical business and find out about where it would apply.

Software Code

So you wrote the code for your very unique application. You've added the copyright symbol and think no one will copy your creation. But if it's good, it's not hard to imagine infringement. And if it does happen, you have a problem, because there's no way to stop the infringement unless you have registered the copyright, which you'll have to then do in a hurry. And once you do, think of the court expenses. Rather than worry about such situations, entrepreneurs should seriously consider copyrighting their code.

Website Design

You wrote the code, but aren't great at design. So you outsourced it to an acquaintance, who built a sleek-looking website. But you didn't sign an agreement with the designer and just used the work. Now let's say two years later you find that the designer produced the same design for another client. What if the client is working in the same space as you? Worse still, what if this client got the designer to assign the copyright to the design to him/her? You see where this is going. So when someone does for you creative work that is crucial to your business, you need to have them surrender all rights to their work.

Marketing Material

Big brands have celebrities promote their products and services. With your marketing budget, of course, you can do no such thing. What you will probably do, however, is share movie posters on social media with your logo on it and images from Getty and Shutterstock. Perhaps, you used a photo editing software to make it more your own, but is that enough? No, it isn't. It is usually seen as a derivative work and, therefore, infringement of copyright, which means that you could be taken to court over it.

There are, however, a few exceptions to this under the 'fair use' doctrine. So if your website features book, music or movie reviews, you may be able to include some of the work without infringing the copyright. Parody is also considered fair-use, as is the use of copyrighted work in academic works.

Lastly, if you're an entrepreneur eager to raise funds, you should know that investors are usually quite particular about protecting your intellectual property, which can be quite valuable should your business succeed.

*VakilSearch simplifies legal for start-ups by facilitating company registration , trademark filing , documentation and compliance.

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