The COVID-19 pandemic forced once brick-and-mortar businesses to move to an online platform. While consumers rely heavily on what appears to be a seamless ordering process online, the reality of maintaining a competitive edge while shifting online is a challenge.
Your clients may recently have requested you defend against a claim for intellectual property infringement or other online content and accessibility claims. Unless you specialize in this area of law, this may be your first such case. But is this trend here to stay in South Florida? Intellectual property infringement and web accessibility trends were steady until recently, with courts in South Florida becoming a hotbed for filings. So, why the sudden change? The COVID-19 pandemic forced once brick-and-mortar businesses to move to an online platform. While consumers rely heavily on what appears to be a seamless ordering process online, the reality of maintaining a competitive edge while shifting online is a challenge. As businesses face reinvention, they also must remain vigilant in understanding the legal requirements. Small businesses, local grocers, tourism-related stores, restaurants, and traditional discount stores that rely on foot traffic adapted quickly to the changing consumer marketplace. Consider the risks and solutions a business faces with an internet presence.
Grocers, clothing boutiques, and specialty stores are among those that cannot afford to expend time deciphering the best online platform to launch a website. Hence, businesses turn to e-commerce platforms or other pre-made themes to for a turnkey virtual business center. The e-commerce platforms provide options for quick set-up at minimal cost. However, a "one size fits all" e-commerce platform is not without problems. Be cautious—know the source of all digital content to avoid lawsuits and lawyer demand letters.
So what are businesses to do? Should they bypass the do-it-yourself options and employ more expensive options? No. A critical approach for any business is to learn as much as practically possible to avoid common mistakes in website and social media content selection.
The Perils of Content
Digital content selection is essential and requires oversight. Businesses may task employees or consultants, often working remotely, to upload content to the business website. Copyright law protects images, graphics, copy and the overall website. Ensure your employees and contractors know that "content on the internet is not free." In other words, the business must license images or create images, not just copy and paste them. Be aware of the source and ownership of photographs, graphics, software code, video and music. Review the website and confirm that the business can identify the source. An image as simple as an apple posted on a grocer's website may require a license to use if you find it while searching the internet.
Some owners of photographic portfolios are targeting websites that use images without the license or permission from the photographer and will initiate a copyright infringement lawsuit.
The Legal Ramifications
Businesses in South Florida find themselves in courts defending these actions. If a business receives a letter demanding it cease using specific photographs, do not ignore the letter. Review it carefully, investigate the content and respond. In South Florida courts alone, a search of the federal court docket shows the same plaintiffs instituting multiple suits for unauthorized use of images. The term "copyright troll" is used to describe individuals or entities who enforce the rights to copyrighted works through targeted litigation for financial gain. Copyright trolls rely on the cost of litigation to encourage settlement. Avoid such entanglements by checking the source of your images.
When a business receives a demand or a summons, it should hire counsel, tender the claim to its insurer, and familiarize itself with the Copyright Act. So, what is copyright infringement? What are the damages for copyright infringement? How do we guard against infringing on another's copyright?
Resources and Information You Need
The website www.copyright.gov is helpful as a guide. A copyright registration defends "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." See 17 U.S.C. Section 102(a). Violation can trigger a strict liability claim, meaning that you can be liable for an innocent, unknowing infringement. Under Section 102(a), eligible "works of authorship" include literary works, musical works, dramatic works, pantomimes, choreographic works, pictorial and graphic works, sculptural works, sound recordings, and even architectural works.
The Copyright Act defines copyright infringement as a violation of "any of the exclusive rights of the copyright owner." The exclusive rights include reproducing, distributing, performing, displaying the copyrighted work, preparing derivative works from a copyrighted work, or performing a copyrighted work employing digital audio transmission. In layman's terms, music, website content, photographs, graphics, marketing materials, floor plans and architectural plans are all owned by someone.
Suppose your business is not careful and uses content without permission; statutory damages can range between $750 and $150,000 for each infringing work, depending on a list of factors a court may consider. Also, successful plaintiffs can request their attorney fees and costs, often exceeding the damages for the actual copyright infringement. So when your business infringes, this is not a $100 fine or a slap on the wrist. Instead, it will amount to thousands to resolve an avoidable problem.
To compound the exposure to businesses, Digital Millennium Copyright Act claims often accompany claims for copyright infringement of photographs and graphics because they involve the removal of copyright management information (CMI). CMI is information that shows the author of a work and other identifying information, such as the year of publication, and often appears as a watermark on the bottom of the work. The court may add to the award for the infringing use a damages award of between $2,500 and $25,000 for CMI removal. This also is a strict liability violation.
So far, we've focused on content, but make sure your business also uses licensed software. If you hire someone to create software or content, you need to obtain an assignment for the work for hire. Explicitly ask the developer and creator for ownership. If you use social media, take caution on what you post— music must be licensed. The law treats businesses and individuals differently. A business needs permission to use music.
In brief, consider the following checklist for your online business:
- Own or license the content
- Own or license the software
- Do not sell counterfeits, and know the source of a product you are reselling
- Confirm the website contains the appropriate boilerplate, such as privacy statements, terms of use
- Make sure your website is accessible for all to use, and has an accessibility policy and a point of contact for accessibility complaints
- Confirm the data collected is protected
- Sell with care!
Originally published by Daily Business Review.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
