Copyright Infringement: Key Considerations and Prevention
Welcome to our overview of copyright infringement, a critical topic for businesses and creators in the digital age. This article provides essential insights into what constitutes copyright infringement, its common forms, and the legal consequences. We also offer practical advice on prevention for both rights holders and potential infringers.
Key Aspects of Copyright Infringement
- A copyright infringement occurs when someone uses a copyrighted work without the consent of the copyright holder. This includes copying, distributing, making publicly accessible, or editing a work when no legal permission applies.
- Typical cases involve music and film piracy, unauthorized use of photos from the Internet, and copying of texts or graphics. File sharing of protected content is also a common issue. Sharing protected content on social media can also constitute an infringement if it is not covered by the right to quote or other exceptions.
- Consequences for infringers include an injunction, which means the infringer must stop further distribution. Rights holders are often also entitled to compensation. In Germany, a warning letter is frequently issued first. This is an out-of-court request to cease the infringement, submit a cease-and-desist declaration, and typically cover associated costs.
- Damages can be calculated using various methods. These may include the lost profit of the author or usual license fees, often referred to as the license analogy. For images, for example, there are tables (MFM) that provide guide prices which can then be claimed.
- Copyright infringements can also be punishable by law (in Germany, for example, § 106 UrhG ff.). This is especially true on a commercial scale. However, this rarely leads to criminal proceedings; it usually remains in the civil law area with warnings.
- Startups and content creators must be careful not to use third-party content without authorization. For instance, do not simply place Google images on your website, and do not copy texts from competitors. The safest approach is to either create content yourself, use free licenses (e.g., Creative Commons), or purchase a license.
- Equally important is protecting your own work from infringement. If you discover that your software has been pirated or your photos stolen, for example, you can respond with a warning letter and legal action. Good documentation of your own authorship, such as project files and originals, helps significantly in the event of a dispute.
Understanding Copyright Protection
In order to understand what constitutes copyright infringement, it is essential to first clarify what is protected. In principle, every literary, scientific, and artistic work receives protection as soon as it is created. This applies provided it is a creative work of one's own (Section 2 UrhG). This protection extends to texts, images, music, films, software code, database structures, and applied art, among others.
Important: There is no obligation to register or mark the work; copyright arises automatically with the author (creator) upon completion of the work. Therefore, you can unknowingly commit an infringement because you may think, “There is no ©, so I can use it.” This is a common fallacy: a missing copyright symbol does not mean “free to use.”
Example: Someone writes an informative article in a blog. This text is probably a personal intellectual creation and therefore protected. If someone else copies this article onto their own website, this constitutes copyright infringement unless the author has given permission.
Common Types of Copyright Infringement
- Image theft: Someone Googles an image and uses it for their own online store or social media post. This is a classic case. The vast majority of images on the internet are protected. It is only allowed if they are expressly released (e.g., public domain/CC0 or your own works), or if you have licensed them (bought from picture agencies, permission from the photographer). Otherwise, it is a clear infringement.
- Copying texts: Copying complete texts or large parts of them from other sites into your own imprint, product descriptions, or blog posts is also critical. Even if a product is the same, you must not simply copy a competitor’s description one-to-one.
- Music and videos: The use of protected music in your own videos without a license or GEMA coverage is a common trap on YouTube & Co. Re-uploading film clips without permission is also an infringement.
- File sharing/downloads: Anyone who downloads the latest films or albums via file-sharing platforms (BitTorrent etc.) often distributes parts of them at the same time and thus commits a copyright infringement. As a result, many people who download via such platforms receive warnings from law firms representing copyright holders.
- Software piracy: The unauthorized use of software, such as cracks without a license, is also a copyright infringement. Companies may be subject to license checks. If it is discovered that, for example, ten Photoshop installations have been used without a valid license, there is a risk of subsequent licensing requirements and possibly contractual penalties.
Rights of the Author in Cases of Copyright Infringement
If your own work is used without authorization, the author or rights holder (this can also be a publisher or producer who holds the rights) has various claims:
- Injunction: The most important aspect is often to stop further distribution. Injunctive relief serves this purpose. In a warning letter, the infringer is asked to sign a cease-and-desist declaration with a penalty clause. By doing so, they undertake to refrain from future infringements; a contractual penalty would be due in the event of non-compliance. This is how the rights holder protects themselves.
- Removal/destruction: In the case of physical infringements, such as pirated copies of books or unauthorized CD copies for sale, the destruction of illegally produced reproductions can be demanded. In the online area, this corresponds to the deletion of files or removal of a copyrighted image from a website, for example.
- Damages: The infringer should compensate for the damage caused by the unauthorized use. Quantifying this is often difficult, which is why the license analogy has become established. The question is, what would the infringer have had to pay if they had properly acquired a license to use the work? This sum is then demanded. For photos, the MFM table, an industry index for image fees, is often used. Additionally, compensation for warning costs and legal fees can be demanded in the event of culpable infringement.
- Information: In some cases, the author does not even know how extensive the infringement is. They can request information from the infringer, such as about sources of supply, distribution channels, or profits made, in order to determine the full extent of the damage and identify other parties involved.
Example: A photographer discovers his photo is being used on three different websites without a license. He can have a lawyer send a warning letter to all three operators. Among other things, the lawyer would demand an injunction (the image must be taken down) and information (since when online, how often used, who supplied it). Furthermore, compensation in the form of a fictitious fee plus a surcharge is often claimed. For instance, a 100% surcharge is frequently demanded if the author's name is missing, as this constitutes an additional breach of duty.
The Warning Letter: A Double-Edged Sword
The warning letter is omnipresent in copyright law. For many, it sounds negative because warnings are often sent out en masse, especially in cases like file sharing, and are sometimes criticized as a "business model." However, the legislator (Section 97a UrhG) actually intends the warning letter as a means of reaching an out-of-court settlement. It offers the infringer a chance to resolve the matter without going to court by stopping the unauthorized act. Additionally, it requires promising to refrain from future infringements and reimbursing the rights holder for certain costs.
For some years now, there have been regulations against abuse. These include capping lawyers’ fees in simple cases with a private background to curb "mass warnings." Nevertheless, the principle remains: if you are caught, you usually have to react, otherwise it can go to court, where costs quickly escalate.
For a company receiving a warning letter, the advice is: take it seriously, but don't panic. First, check (or have checked) whether the accusation is true. If so, it is usually better to submit the requested cease-and-desist declaration – modified if necessary – to achieve a peaceful resolution and pay the costs. If the claims are unfounded or seem exaggerated, seek legal advice and reject them. Simply ignoring them is often the worst option, as an injunction or legal action could follow.
Criminal Law Aspects of Copyright Infringement
The Copyright Act makes some acts of infringement punishable (Sections 106 ff. UrhG). However, the threshold for criminal proceedings is high. In most cases, the infringement must be on a "commercial scale" or the infringer must have stubbornly continued after a warning. In everyday life, it is rare to face police involvement for an image stolen from a homepage. Nevertheless, in serious cases, such as professional bootleg factories, large-scale piracy, or the operation of illegal streaming portals, law enforcement officers will take action. For the normal startup, it is more relevant to act criminally, to offer commercially protected content.
Another important issue is the liability of platforms. Providers who enable users to upload content (e.g., YouTube, forums) have long been subject to discussions about their joint liability for user copyright infringements. Currently in the EU (keyword "upload filter," Article 17 DSM Directive), large platforms must take preventive measures against user-uploaded content infringing copyright. Small startup platforms, however, benefit from some relaxations. Nevertheless, anyone planning such a business model should closely follow developments surrounding copyright service provider liability. In any case, a mechanism must be in place to quickly remove reported infringements (notice-and-takedown).
Prevention of Copyright Infringement for Startups
Of course, it is best to avoid copyright infringements from the outset – both as the infringer and as the injured party.
As a Potential Infringer
- Train employees on what they are allowed to use. Do not simply take an image from Google. It is better to use license-free resources (stock photo services, Creative Commons with careful checking) or create your own material.
- License software properly; do not resort to illegal copies for "cost reasons." This can be very expensive at the latest at the first audit.
- With social media content: Be careful when sharing other people's pictures. Platforms such as Facebook have their own rules, but many things remain legally unclear. Memes and the like are often in a gray area (in the USA there is fair use, in Germany sometimes the right to quote, parody, etc., but this is risky). If in doubt, ask or refrain.
As the Rights Holder
- If content is the capital of the startup (e.g., a photo community, a software tool, a blog), you should actively monitor whether third parties are using the material without permission. Tools such as Google Image Search (reverse search) help to track down your own images on the web. There are also professional services that check texts or code for plagiarism, for example.
- React consistently but proportionately to infringements. A polite tip to a small blogger can sometimes be enough instead of immediately sending a lawyer. In the case of clear commercial exploitation, however, it is best to make use of your own rights; ultimately, this also protects the legitimacy of the business model.
- Contracts with employees and service providers should stipulate that all rights to created works are transferred to the company. This refers to "employee copyright." By default, even employed developers remain the author of their code; you must obtain rights of use contractually, which usually happens in employment contracts. For more details on this, see topics like employee participation in early-stage startups.
Conclusion
A copyright infringement, whether minor or extensive, is a serious matter that copyright law actively pursues. Startups must be vigilant both in respecting existing copyrights when using third-party services and in protecting their own creative content. Understanding these legal frameworks and, crucially, seeking permission upfront, is essential to avoid costly disputes and financial damage.