If You’re Going to “Wing It” as an Entrepreneur

“Yay!!” by Subharnab Majumdar from Flickr (Creative Commons License)

Plenty of entrepreneurs start out as a person or two, a business idea, and a shoestring budget. They know their craft but have limited or not experience starting or running a business. They don’t know what they don’t know – and that’s what gets them into trouble.

Many entrepreneurs employ the “we’ll learn as we go” approach to operating a business. Often times these are smart people, but if they get too focused on doing their business that they don’t take care of business within their operation, it can lead to costly mistakes: thousands of dollars in legal expenses and painful heartache to try to fix a problem that was completely avoidable.

Real-Life Facepalm Moments
I’ve had countless times where a business owner comes to me for help and I cringe and think, “We could have helped you avoid this if you had come to us sooner.” This is just a sample of my facepalm moments as a lawyer:

KAWS “At This Time” Sculpture by Guilhem Vellut from Flickr (Creative Commons License)

  • Owners who don’t create a business entity: put their personal assets at risk if the business gets sued;
  • LLC with multiple owners and no operating agreement: painful business “divorce” when things didn’t work out between owners;
  • Filing a trademark application with the USPTO that wasn’t trademarkable: the application might have had a chance if the description of the products and services was written more effectively;
  • Not filing a trademark and your competition files a trademark application that’s confusingly similar to or the same as yours: costly to make a claim against them and it may not be successful, which could force you to rebrand even though you were using it first;
  • Flawed customer contracts: doesn’t fully protect the company’s interests or address all likely contingencies;
  • Hiring a third-party contractor without a contract: if the person is hired to create an original work for the company, the company won’t own the copyright in what they hired the person to create and may have to pay to acquire it;
  • Working without a contract: so many problems. Whenever I get a call about a business deal gone bad, my first question is usually, “What does your contract say?” (Ideally, you want to be in a situation where, if the other side doesn’t perform as you agreed you can essentially respond with, “F*ck you, pay me.”)

If You’re Going to “Wing It”
If you are starting a business, my unsolicited advice is “Do your homework.” Invest the time to learn what goes into running your business and figure out what you don’t know. Reach out to established entrepreneurs to ask for their advice and avail yourself to resources in your community. In Arizona, we have dozens of these organizations like Arizona Small Business Association, Local First Arizona, and SCORE.

Even if you don’t think you can afford it, look into hiring a business and intellectual property lawyer for an hour. Bring them your ideas of what you want to do, and ask for their recommendations on how to make it happen. A good lawyer will respect your budget and tell you what you can do yourself and what you should hire a lawyer do for you. They can also recommendations resources to help you based on their experiences helping others.

If I’ve learned one thing as a lawyer it is that it’s easier and cheaper to prevent problems than to fix them.

True Story
Years ago, I worked with a new company where the owners hired me to create their operating agreement. I asked a lot of questions about things like intellectual property rights, compensation, and worst-case scenarios (e.g. disability of an owner) to create custom provisions for this document.

A few years later, the owners realized it wasn’t working out between then and decided to part ways. Their operating agreement dictated how they would address this situation, and they hired us again to revise the agreement to account for the exit of one of the owners. The process was professional, respectful, and cost-effective. I’m sure there were hurt feelings on both sides, but having this operating agreement helped the owners mange them and made for a smooth transition.

If you want more information about the legal dos and don’ts of starting and running a business, you can send me an email (Note: I can’t give advice to non-clients), and I maintain a mailing list where I share my thoughts about being a lawyer/entrepreneur, updates about projects I’m working on, upcoming speaking engagements, and I may provide information about products, services, and discounts. You can also connect with me on TwitterFacebookYouTube, or LinkedIn.

The 10 Legal Commandments of Entrepreneurship

“Stained Glass Window Full of Light and Color” by Stock Photos for Free from Flickr (Creative Commons License)
Link to www.stockphotosforfree.com/

Since becoming a lawyer in 2011, I’ve had the privilege of working with businesses on a variety of legal issues. Looking back at some of the most cringe-worthy moments I’ve experiences I’ve had and heard about from other business and intellectual property lawyers, I’ve come up with a list of the 10 legal commandments of entrepreneurship:

 

1. Thou shall have a business entity.

When you start a business, create a business entity – an LLC or corporation. Your accountant can tell you which option is best for you. By separating the business from your personal assets, you limit your personal liability if the business is sued. If you open a business without an entity (aka a sole proprietorship), you don’t have this layer of protection.

 

2. Thou shall maintain your corporate veil.

Creating a business entity is how you begin to limit your liability, and you perfect that protection with a “corporate veil.” This means having a separate bank account and credit card for the business, and the business accounts pay for business expenses and your personal accounts pay for personal expenses. This creates a clear delineation between where the company ends and the person begins in terms of your finances. If the company is sued and loses, it’s clear which assets belong to the company and your person assets are protected.

 

3. Thou shall have a signed contract at the beginning of a business relationship.

When you are hired by a client or hire someone, start with a signed contract. A contract is a relationship-management document. It is your master document that puts everyone on the same page regarding their responsibilities. This will help you avoid confusion and resolve problems. When a client comes to me with a problem with a customer, I often start by asking “What does your contract say?”

 

4. Thou shall be thoughtful and careful about looking online for a contract template.

Looking at templates online is a good place to get ideas about terms you might want to have in your contract, but don’t indiscriminately use any contract you find. You don’t know where it came from or whether it’s suitable for your needs.

 

5. Thou shall take the time to fully read and understand a contract before signing it.

Never be afraid to ask questions or request changes when considering a contract offered to you. Don’t sign anything you don’t understand, because if you sign it and later regret it, you may be stuck with it.

 

6. Thou shall respect others’ copyrights.
Do not use others’ work without permission. Create your own original content. It’s ok to be inspired by and quote others, but add something to the conversation. If we’re talking about images, do not pull any image you find using a regular Google search. Seek out sources that provide licenses for use, including images available under Creative Commons. If there is an image you want to use that’s not available, contact the copyright holder and ask for permission. To date, I’ve never had anyone say, “No.”

 

7. Thou shall check the USPTO before branding a company or product.

When entrepreneurs think “branding,” lawyers think “trademark.” The United States Patent and Trademark Office (USPTO) has a database where you can see what company names, product names, and logos others have applied for and registered for their products and services. You don’t want to fall in love with, or invest a lot of time and money in, a branding idea to find out that it’s already been claimed by someone else.

 

8. Thou shall outsource your taxes.

Every entrepreneur needs an accountant. Let them do what they’re good at.

In the time it would take you to try to do your own taxes, you could make more than enough money to pay an accountant to do your taxes for you.

 

9. Thou shall consult thy attorney.

Even when you want to do things yourself, talk to your lawyer to make sure you’re not setting yourself and your business up for future problems. My most cringe-worthy moments as a lawyer have been problems clients created for themselves that we could have helped them avoid completely if they had told us what they were thinking about doing. It is easier and cheaper to prevent legal problems than to fix them.

 

10. Thou shall act with integrity.

Put your energy into your own business, creating quality products or services for your audience.

You don’t need to stoop to bad-mouthing the competing, using trademarks that are confusing similar to others, or ride other’s coattails by doing things like using a web domain that will allow you to pull an audience based on someone else’ popularity (e.g., cybersquatting). Be so good at what you do that you don’t need to use others to make a name for yourself.

One last note: If you’re an entrepreneur, don’t be afraid to ask for help. Accountants help you make money, lawyers help you keep it, and your peers will share their experiences so you can learn from them. If you are an entrepreneur, or have plans to become one, I hope you have people around you who can help you be successful.

If you want additional information about the legal dos and don’ts of starting and running a business, I maintain a mailing list where I share my thoughts about being a lawyer/entrepreneur, updates about projects I’m working on, upcoming speaking engagements, and I may provide information about products, services, and discounts. Please add yourself if you’re interested. You can also contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn.

Model Release and Regret

“Subway Ballet” by J Stimp from Flickr (Creative Commons License)

Recently, I received an email from a photographer (not my client) who had a question about the validity of model releases. As I understood the situation, he hired a model (over age 18) to do a photoshoot at his studio. The model was photographed nude for at least part of the shoot. The model signed a model release and was paid for her modeling services.

After the photoshoot, the photographer censored some of the images to comply with Facebook’s rules and posted them online.  The model saw the images and was upset. The photographer asked me if the model had any authority to force him to take the images down.

The Rules of Model Releases
Model releases are standard in the photography world. In most cases, the photographer owns the copyright in their work from the moment the photo is created, not the person in the photo, and the model owns the right to publicize their own image.

The model release transfers the model’s right to publicity in those images to the photographer, which allows the photographer to use the images per the terms of the release. Usually, when I write a model release or a model release template, the model gives the photographer permission to use the images in any way and for any purpose, without restriction.

In general, once the model release is signed, the model’s given up their rights. If the model later regrets signing it, there may be nothing they can do to “unring that bell” unless the photographer is willing to negotiate another agreement – such as a copyright assignment where the model purchases the copyright rights in the images from the photographer.

Think Before You Sign
If you are a model, read the model release carefully. Never sign the release without reading and understanding it. Many of them allow for unfettered use by the photographer, including the right to license the images to others. Treat the images as if they are going to end up all over the internet, on billboards, on products or marketing campaigns you hate. Chances are, that’s not going to happen, but it could.

I write not just as a lawyer, but also a model myself. On a number of occasions, I have written and signed my own model release. Models may give up substantial rights when signing these documents, so it’s not a decision to make lightly.

What Could Invalidate a Model Release
Even if the model release was written by a lawyer and appears to valid on its face, there are situations where a model release might be invalid due to the circumstances surrounding the shoot:

  • The model was minor (Depending on your state, minors may not be able to sign contracts or they can withdraw their consent upon reaching the age of majority.)
  • The model was an adult but lacked the capacity to enter into a legally binding contract. (These people usually have an appointed guardian to sign for them.)
  • The model was intoxicated. (In general, intoxicated people can’t enter into valid contracts.)
  • The model was forced to sign the contract under duress. (You can’t get a valid contract if you use threats or force to get someone to sign it.)

There can also be instances where the photo in question was taken outside the scope of the model release and so the model release does not apply.

I get questions every day about photography, image rights, and copyright. If you are a photographer or model (or aspiring to be one), it’s imperative that you understand these issues. Many disputes can be avoided with well-written contracts and accurate information. I’m constantly doing work in this area, so if you want to keep up with what I’m doing or if you need help, you can contact me directly or check out the other posts and videos I’ve done on the legal side of photography. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Copyright Notice Done Right

Copyright Notice on Burn

Last weekend, I watched a documentary, Burn, about the Detroit Fire Department. (It’s an intriguing documentary film about these amazing people and how the economy’s crash impacted these firefighters and their community.)

As a lawyer, one of the things I liked about this film was the simplicity of its copyright notice. It had the standard FBI and Interpol warnings (which play through while I’m grabbing a snack), but this last notice caught my eye. It said, “This copy of ‘Burn’ is licensed for Private Home Viewing Only. Any other use is prohibited.” The notice went on to state how to request permission for other uses.

One of the complaints about the use of legal verbiage in everyday life is that it’s often too long to be worth reading, it’s filled with complicated legalese, and it’s in a tiny font. (How many times have you accepted the terms on a site without reading it?) This notice combats everything that’s wrong with the current systems:

  • It used plain language.
  • It was short.
  • It was readable.

A ten year-old could read this and understand what it means. I have never met a ten year-old that’s tried to read the FBI warning before watching a movie.

This notice made me smile. I wish more creators do things like this when declaring their rights and informing others how to seek permission for different uses. Sometimes complicated legalese is necessary, but generally not in mundane situations. Legalese in everyday life should use everyday language.

I’m an advocate of writing contracts and notices in plain English and keeping them as short as possible while still being effective.  If you have questions about your copyright and contract needs, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Trademark Rights in Website Domains

Business Entrepreneurs by Airsoftpal.com (Creative Commons License)

I regularly get questions about whether a person should use a business name based on whether their desired website domain in available. There is also the reverse – if a company has a registered trademark, is it a deal-breaker if you want to use a similar name for your business? For example, if a company has a registered trademark for The Ooga Booga and the domain theoogabooga.com for their children’s book series, does that mean you can’t have the domain, oogabooga.com for your business?

Ooga Booga is my default fake trademark when describing trademark concepts. As of this writing (3/5/2017), no one has a registered trademark in the U.S. for “Ooga Booga.”

Two Parts to a Trademark
There are two elements to every trademark – the mark itself and the product or service with which you are using it. It’s possible for two different companies to use the same trademark so long as the products and services with which they are using it are so different that no consumer will be confused about what they’re buying. That’s why it’s possible to have Delta Faucet, Delta Airlines, and Delta Dental. No one would think these products and services come from the same company.

Do your Homework when Selecting a Domain
When it comes to selecting your company or product name and the corresponding domain, be thoughtful. Do you some searches to see if other companies have similar domains and how they are using them.

If you see someone using a domain that is similar to yours, or a product or company domain that has a corresponding registered trademark, it’s not necessarily a deal-breaker for your business plans, but you may want to do further research. There’s nothing wrong with two companies have similar websites as long as you have a legitimate reason for using it and you’re not violating the other company’s rights.

Let’s say you wanted oogabooga.com as your website, examine the difference between your product or service and the registered trademark for The Ooga Booga. They sell children’s books; so as long as your product or service isn’t in the arena as children’s entertainment, education, or related products, you could be ok. Most likely, no one will think that your affiliated with this other company if you’re selling something like wetsuits, wine, or financial planning services.

If you’re in a situation where you don’t want other companies having a similar domain as yours, spend the money to buy these other domains. It’s cheaper and easier to have a slew of domains related to your product rather than invest time and money monitoring, sending cease and desist letter, or pursuing other legal action against these other companies.

Only the Trademark Holder is a Threat
The good news in this type of situation is only the person who owns the trademark or other intellectual property rights can go after you for suspected infringement. If they don’t know or don’t care about what you’re doing, you face any legitimate legal threats.

Of course, when in doubt, consult a trademark lawyer to discuss your thoughts about your business or product name and website domains. If you’re interested in discussing your trademark needs, you can contact me directly or an intellectual property lawyer in your community. I regularly post about legal issues impacting entrepreneurs on TwitterFacebookYouTube, and LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

More Information about Trademarks:

Photo credit: Airsoft Pal

No Protection for Short Phrase T-Shirts

FUNNY ASS SHIRT by Douglas Muth from Flickr (Creative Commons License)

I regularly get questions from people who sell shirts on Etsy, Café Press, or a similar website and they claim that another user is stealing their design. When I look more closely at the situation, I see all the person is selling is shirts with a short phrase, in a common font, and no other artwork or design elements. Many times, I have the unfortunate responsibility of telling them that there’s no intellectual property in their design, so there’s no infringement (that’s legalese for “stealing”).

No Copyright in Short Phrases
Copyright applies to original works of authorships when they are fixed in a tangible medium. A t-shirt is a tangible medium, and it’s possible to have an original work on a garment. However, short phrases aren’t original works, so the act of merely printing one on a shirt does not create a copyright-protected article.

If that’s all you’re selling – word or a phrase on a shirt – there’s likely nothing you can do (from a copyright perspective) to stop your competition from selling a shirt with the same phrase on it. If you look on any of these DIY shirt and craft sites, you’ll see the same phrases on shirts from different sellers. There’s no copyright protection for words, images, or phrases like “geek,” “reasonable person,” “Introverts Unite! Separately in your own homes,” and even more creative phrases like “terminally soulless douche canoe.”

The Anti-Titanic Shirt

This used to be less of a problem before we had Teespring, Zazzle, and sites that make it easy to create and sell shirts and whatnot. In the past, if you wanted to sell a shirt, you had design it, have it printed, and then sell them in shop or on the street, or if you had html skills, you could create a website and people could mail you a check for a shirt. That’s what my friend, Peter Shankman, did when he sold anti-Titanic shirts in 1998. He started selling them in Times Square and then sold them online. He was a success, in part, because he had no competition.

What Could be Infringement
Every t-shirt design on Etsy is not up for grabs. Copyright does not protect short phrases, but it does protect designs with original artwork on them. Additionally, copyright protects the images you post of your shirts on your site. If you see another seller using your photos, that would likely be infringement (assuming it’s your photo). Sending a DMCA takedown may be sufficient to get them removed from their online store.

The other thing to watch for is trademark infringement. A seller can use a short phrase as a trademark to brand their wares. They can also create a logo that they put on their products. If you see someone using your trademark or a mark that is similarly close to yours, that could be infringement and worth investigating.

Beat the Competition in the Marketplace
For anyone who is selling these types of shirts, the best way to deal with your competition is be better than they are. Give your customers a reason to buy from you than from another seller, or having it made at a t-shirt shop. It could be your prices, the quality of the garments, or something about your company that makes you more desirable than the others.

Beyond that, you may want to consider upping your t-shirt game by creating or purchasing designs that will be protected by the Copyright Act.

Copyright is an area of the law with many gray areas, so if you’re having legal issues regarding your copyright rights, you can contact me directly or an intellectual property lawyer in your community. I regularly post about copyright and other IP issues on TwitterFacebookYouTube, and LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Trademarks: Register or Rebrand

WordPress Swag by Caspar Hübinger from Flickr (Creative Commons License)

One of my entrepreneur friends recently asked me if he “had to” register the logo for his company. I responded with, “How much would it suck if you had to rebrand?”

Why Register your Trademark
Your trademark is the name, logo, and other branding you put on your products so consumers can tell the difference between your brand and your competition’s. When you have a registered trademark for your brand, you can stop anyone from entering the market with a similar brand on a similar product as you. The law doesn’t like it when your competition tries to ride your coattails by looking too similar to your brand. When you register your trademark, your rights extend to everywhere in the United States, even if you’re not doing business everywhere in the country yet.

If you don’t register your brand, you can only get “common law” trademark rights that are limited to where you’re doing business with your mark. Your competition can use the same or similar brand where you haven’t established yourself. And if they register the brand before you, you may find yourself frozen only to your established marketplace, which may be quite small. Just ask the original Burger King restaurant what that’s like.

Cheaper than Rebranding
What does it cost to have a logo designed?
What about a website?

The fee to submit a trademark application to the U.S. Patent and Trademark Office (USPTO) is $225-400, if it’s only for one type of product or service. Even with the fee to have a proper trademark lawyer submit and track the application, it’s often cheaper to apply for a registered trademark instead of rebrand. If someone else registers your trademark before you, you may be forced to rebrand if you want to continue to grow your business and expand your marketplace to reach more potential customers.

Brand Theft Happens
I have seen and worked on a number of situations where a company could have avoided a lot of heartache and legal bills if they had registered their trademark, because their competition registered the same or similar trademark before they did. Turner Barr essentially had his trademark, Around the World in 80 Jobs, stolen out from under him. He had to cease operations to address the situation. Thankfully for him, his story had a happy ending. Other companies are not as lucky.

A substantial portion of my work involves analyzing, registering, and challenging trademarks. If you need help with your trademark situation, you can contact me directly. I also post about these issues on TwitterFacebookYouTube, and LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Legal Issues with Open Photoshoots

Parkwood Photography Studios, used with permission

Last week, I went to an open photoshoot/happy hour at Parkwood Studios. (They have a gorgeous space!) It’s a free monthly event for photographers and models of all skill levels and experience. There was an area set up with lights where anyone could model and shoot photos. The purpose is to give everyone an introductory experience working with a model in a studio environment. There was not a model release or TFP agreement for this event.

I went to this to network and to model. As a lawyer, I knew what I was getting into in regards to copyright and image rights. Of course, my analytical brain couldn’t stop strategizing what I’d do to integrate legal protection and information without disturbing the spirit of the event.

Who’s At Risk, Who’s Protected
There are three groups who should be interested in protecting themselves at an open shoot: the models, the photographers, and the studio. If I represented a studio that hosted an open shoot, I’d recommend having a release that states the studio is not responsible for anyone’s behavior. If there’s a dispute between a model and a photographer, that’s an issue to be resolved between the two of them.

One of my images from the open shoot. I look like a action hero.

Model Release and Copyright Notice
Even in the photography/modeling industry, a lot of people do not understand copyright and image rights. In an open photo shoot, the model and photographer exchange their time, talents, and the opportunity to practice their respective crafts. Unless stated otherwise in a written agreement, whomever took the photo owns the copyright.

The expectation at these events is that photographers and models exchange contact information so the photographer can share images with them, and that the models are allowed to put the images in their portfolios or share on social media. I suspect the studio would also want a license to the use any images taken at the event that they receive or that are posted to their social media to promote future events or the studio.

No Guarantees
The one of the complaint I heard from past events is models saying a photographers who took photos of them never sent any images. While that is poor form, the only way I can think to legally work around this is to have a “no guarantee” clause. There’s no guarantee the photographer will send the model photos and there’s no guarantee the photographer will get the shot they want.

Code of Conduct
Since this is an event for all experience levels – including fledglings – I recommend having a code of conduct that applies to everyone and the studio’s equipment. This would include basic things like “Always ask permission before touching a model,” “Don’t touch the lights or any equipment that’s not set up for use at this shoot,” “Give constructive feedback,” and “Be respectful – we’re all here to learn and have fun.” A lot of these are common sense, but it’s good to state the obvious for people for whom it might be their first time shooting in this type of environment.

For studios like Parkwood that host regular events, I suggest creating reusable poster-sized copies of the rules and release and put it on the door leading to the photoshoot area with a notice that says by entering the room, you agree to these expectations. For anyone who wants to shoot photos or model, put a clipboard with a dated copy of the agreement and a signature page where everyone must agree to the rules before they’re allowed to participate. This serves multiple purposes:

  • It gives photographers and models experience with reading and signing these agreements.
  • It creates expectations and helps avoid conflict for all involved.

I get questions every day about photography, image rights, and copyright. For anyone who works as a photographer or model, it’s imperative that you understand these topics. Many disputes can be avoided with well-written contracts and accurate information. I’m constantly doing work in this area, so if you want to keep up with what I’m doing or if you need help, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Copyright License for Commissioned Art

“and the years have wings, detail” by Olivia Kirby from Flickr (Creative Commons License)

There are services that will print your photos and other artwork onto canvas – even in Walgreens. I recently heard of a situation where a customer commissioned an artist to create a portrait. The artist created the work and sent it to the customer as a JPG file, that the customer could use to get it printed onto paper or canvas. This may be a more efficient and cost-effective way for artists to create original pieces for customers.

The customer took the image to be printed on canvas, and the photo processor refused to do it without a release from the artist. I’d never heard of a printer requiring this, but the customer encountered this problem when they tried to use two different printers. To avoid such problems and delays in the future, the artist should provide a license with the JPG file for printing in case the customer is required to provide it.

Photo Processors and Copyright Infringement
Should photo processors be concerned about customers using their services to make unlawful copies of another person’s work? Probably not. I suspect a customer that comes in with a JPG to create one photo product is likely not committing copyright infringement. Of course, there’s an exception for art that is so well-known that a reasonable person would recognize the likelihood of infringement.

One way a photo processor could protect themselves from accusations of contributory copyright infringement would be to include a check box on the order form where the customer attests that they own or have permission to use the image in this way and indemnify the photo processor in the event of infringement lawsuit and with reimbursement for all related costs and damages. I know the company I use to print my custom t-shirts has this on their order forms.

License for Commissioned Work
This problem sounds like it’s easy to fix: the artist can add a licensing provision to the agreement that specifies upon payment in full, the customer will receive a JPG of the work and a license for how the customer may use it. That provision can specify that the artist retains ownership of the copyright and the customer may have the unaltered JPG printed on paper, canvas, and any other permitted medium for personal use (which may involve soliciting the services of a third party printer). That should hopefully be enough to satisfy the concerns of any printing service.

The artist may want to add other licensing terms, such as it’s a non-exclusive, paid-in-full, royalty-free license, whether the license is perpetual or time limited, how many prints the customer may make, and any other permissions or restrictions the artist wants to impose of their work. An intellectual property lawyer can provide more information about what provisions to include in such an agreement.

I was surprised to hear about this situation, especially if the customer only asked for one print. I would expect the order to be more extreme to raise a red flag for a printer, but on the other hand, I’m pleased to see printers being mindful about what they’re being asked to create. The laws and rights related to intellectual property are complicated and always situation-dependent. If you want to connect with me about your intellectual property rights as a consumer or an artist, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Using Movie Clips in your YouTube Videos

Wedding Crashers by Kurt Bauschardt from Flickr (Creative Commons license)

Some people incorporate clips from mainstream movies into their YouTube videos. Depending on the circumstances, it may or may not be legal.

Movie Studio’s Rights
Whoever owns the copyright in the movie has the exclusive right to control where the work can be copied, distributed, displayed, performed, and what derivative works can be made from it. This applies to the whole film and clips of it. The copyright owner is also the only one who can come after someone for copyright infringement. So, if they don’t know or don’t care about what another person is doing with their work, that person will never get in trouble.

What about Fair Use?
The powers that wrote the Copyright Act understood that existing artwork inspire other artists to create new works. To that effect, they created the fair use provision of the copyright law (17 U.S.C. § 107 if you want to look it up).

The fair use law allows a person to use another’s work for the purpose of criticism, commentary, research, and teaching – often in ways that thoughtfully add to the existing work. The law provides four factors that the court may consider in determining whether a use is copyright infringement or fair use (which I turned into the handy mnemonic device PAIN), but these are merely points of consideration.

The fair use factors are not a mathematical equation to use to get a definite answer. The only way to know for certain if a use qualifies as fair use would be if there’s a lawsuit and the court makes a ruling on the matter. However, if the use of another’s work is transformative and doesn’t become a substitute for the original work in the market, there’s a good chance it’s fair use.

One way to avoid the issue about whether using a clip is copyright infringement or fair use, would be to get permission to use the clip by purchasing a license. Without this permission, there’s a risk that the copyright owner will order your video to be removed until the offending clip is removed.

Using a Movie Clip – Good Idea or Bad Idea?
If a client asked me about using a movie clip for a purpose other than criticism, commentary, as a teaching demonstrative, or an original compilation with other works, I’d challenge them to explain why they want to use that clip and what value it adds to their work. I’d also encourage them to at least do their homework on the copyright owner to see if they have a track record of going after people who use clips of their work without permission.

Ultimately, I respect my clients’ choices, but I try to help them make informed decisions about the risk they’re accepting when they use another’s work. Copyright and fair use situations are always complicated and always depend on the specific circumstances. If you want to connect with me and hear more thoughts about copyright, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.