Cease and Desist!

There is something about a letter on official lawyer letterhead with the ominous words "cease and desist" that can be very intimidating. "What did I do?", you wonder. "What are they going to do to me?"

A cease and desist letter can be very frightening, especially if it contains language about immediate litigation if you don't do exactly what is requested of you in the time period allotted. So what exactly is a cease and desist and what should you do if you receive one?

A cease and desist letter can take many forms from a fairly friendly reminder that you are using some intellectual property that doesn't belong to you to an outright threat of litigation if demands aren't met in a specific amount of time. Typically, a cease and desist letter falls somewhere in the middle and outlines who the person is who is writing, the interest of their client and what actions you have taken that has apparently infringed on their client's rights. The letter will also include some request for relief such as an outright halt of your allegedly infringing activities. It may also request information behind how you obtained the images (if it is copyright) or how long your alleged infringement has occurred.

The key to remember whenever receiving a cease and desist letter is to not panic. There are quite a few cease and desist letters that are sent that have absolutely no basis in fact (or in law). The best course is to first send the letter to your intellectual property counsel so they can determine what is being alleged. They should then ask for information from you to determine whether there is some factual or legal basis for the claim. Then, with your approval, they should prepare a formal response that addresses the allegations contained in the letter. Some times this could include agreeing to halt the infringing activity to avoid litigation.

Depending upon how thorough the response is and how unfounded the complaint was, you may not hear anything further from the other party. Of course, they may also find your response inadequate and proceed to file suit. Even if this happens, however, you have been given an idea of what they will argue and so it should not be as much of a shock if they actually file suit.

The ideal way to deal with a cease and desist letter is to review it, send it to counsel and make sure that counsel has enough information to make an accurate and thorough response. Good communication, even with someone who is threatening to sue you, is very important in heading off a lawsuit!
image: PearlsofJannah (through Creative Commons, some rights reserved)
All text © 2008, Hardy, Carey, Chautin & Balkin, LLP. All Rights Reserved.

An Idea Ripe for the Taking

image: Tiago Daniel
We all have ideas at one time or another. Some are good, some are bad and most are rather mediocre. And then, there are those few that are brilliant - at least we think so. But, what happens when your brilliant idea shows up as being thought of by someone else? Or worse, they're making money off of it and you're not? What do you do?

It's actually not a very simple question.

While the law is breathtaking in the breadth of areas that it covers, it's not always immediately obvious just where a perceived wrong fits in. Theft of an idea is one of those things that may be an exercise in fitting a square peg in a round hole. Perhaps surpisingly, none of the areas of intellectual property law that our firm practices - trademark or copyright - provides any amount of assistance.

The Copyright Law is very clear that ideas are not protected (and neither are procedures, processes, systems, methods of operation, concepts, principles, or discoveries.) Copyright protects only the expression of that idea. If ideas were covered, no one would be able to paint a picture of a bowl of fruit or write a play about relationships because there would be that one person who had already claimed the copyright in those ideas. The world would be a dull place indeed.

Should someone decide to paint a bowl of fruit, the copyright law will protect the expression of that painting: the manner in which the fruit is arranged, the lighting, the draping used, the style of the painting (abstract? modern? traditional?) and all of the other factors that go into making that particular painting unique. Indeed, the law itself only provides protection to original works of authorship. How can an idea to paint a bowl of fruit be original?

Trademark law also is no help. It is only interested in the mark that you use to sell your idea. It could care less what the item actually is. (Patent law, of course, would be mentioned as a possible contender. However, that is for a blog other than ours.)

Perhaps ideas can have no owners and instead be recognized by society as open to all for their use and expression. Now that is a novel idea.

What is My Picture Doing On Your Website?

We live in a click and save world. It is astonishingly easy to save a picture that you find on the internet onto your hard drive simply by right-clicking on your mouse and choosing "save". And that is the beginning of a minor nightmare for many owners of iconic images or important pictures.

For many businesses, the investment in good photography is essential. You need appetizing pictures of your entrees, beautiful pictures of your necklaces or sleek images of happy people enjoying your restaurant to entice customers. Many businesses turn to a professional photographer to get just the right look and then use those pictures universally in print ads, on the internet and at the point of sale to reach customers.
image: Tal Bright
But what happens when you see your photograph that you spent a great deal of money on being used to advertise someone else's entrees or jewelry or restaurant? Besides seeing red, you would wonder how they got their hands on it and what you can do about it. The first question isn't nearly as important as the second question.

When you find yourself staring at your photograph being used to promote someone else's business, the best thing to do is contact your intellectual property counsel with as much detail as possible about where you saw the picture being used. Copies of the use are particularly helpful. Also be able to answer questions such as how did you find it, where was it featured, who published it and was there any contact information. The more information you can provide on the front end, the easier it will be for your counsel to track down the person who is using the photograph.

What will your counsel do? I cannot speak for other firms, but our firm typically evaluates the issue and determines what kind of problems are present. If a picture was stolen, then it is probably a copyright infringement issue. If the logo for the entity is also there, then it can also present a trademark infringement or dilution issue. Once we have evaluated what types of issues are involved, then we determine the appropriate response.

Usually, our opening salvo is a cease and desist letter pointing out the problem and demanding immediate correction, normally removal of the picture and destruction of it. In some cases, the copying is so blatant and so malicious, that a cease and desist letter may not be useful and we determine that it would be better simply to file suit for infringement. Your intellectual property counsel will determine based upon their usual course and the facts at hand what course is best in your situation.

Once contact with the infringer is established, then it is useful to find out how the person got their hands on the picture in the first place. If they got it from someone else, for example an ad agency, there may be a need to go to the ad agency as well. Often times, the person may have gotten it simply by right-clicking on the picture on your website. Regardless of what they were thinking when they did this, it illustrates how easy it is for others to hijack the intellectual property of someone when it is not properly protected. The best way to do that is to disable the right-click feature for pictures. This will not deter all people who want to use your picture, but it will make it much less attractive to those seeking an opportunity.

When you pay a lot of money to have professional photographs taken for your business, there is not much that is more discouraging than to find someone else using them without having paid for them. The good news is that you can prevent this with a simple disabling of the right-click mechanism and you can help your counsel identify and go after the person who does manage to steal your pictures.

Streaming Right Into Trouble - Part II

This is the second in a two-part series on internet streaming and the copyright issues that go with it. This part will discuss the application of the new streaming rules. The first part discussed the history behind the new streaming rules.

Part Two

The decision of whether or not to stream a broadcast of music or any music at all on the Internet is actually quite complicated. There are costs associated with the software used, licensing of the musical works (the lyrics and composition) through the "performing rights societies" BMI, ASCAP and SESAC and, of course, the licensing of the sound recordings (the actual recording that is played). On top of the costs, there are reporting requirements as well. And, then, there are the minimal statutory requirements that must be met before you even begin streaming. For many broadcasters, the decision tree ends pretty much where it began after the costs in time, resources and money are added up.
image: tizianoj

For those who decide to continue on despite this, the process can be broken down into several steps.

1) Find the right software. Ideally, the software should be able to keep track of a lot of data including the number of listeners at any given time and what tracks were played when. If it has the ability to generate reports, that is even better. The right software will make life much easier and help with No. 2.

2) Meet the statutory requirements. The Digital Millenium Copyright Act ("DMCA") was set up in such a way that broadcasters who stream music get a statutory license to do so - which eliminates the need to go to each and every music owner to get a license for all of the music that is played- but only if the broadcaster meets all of the requirements.

3) File a notice with the Copyright Office. It's still not time to flip the switch just yet. The broadcaster must now have to file a Notice of Use of Sound Recordings Under Statutory License with the Copyright Office (and pay a $20 fee). The good news is that this is a one-time filing, unless you have information that changes in which case, an amended version would need to be filed (with a new fee, of course).

4) File a Statement of Account with SoundExchange. SoundExchange is the clearinghouse organization that was appointed by the U.S. Copyright Office to collect royalties from the internet streaming of music, among other things, and distribute those royalties to the artists who own the copyrights in the sound recordings that are being played.


The good news is that the Statement of Account can be filed with SoundExchange after the broadcaster starts streaming. The bad news is that the minimum payment must be included with it.

Once the software is in place, the statutory license requirements are met, the notice is filed with the Copyright Office and the Statement of Account is filed with SoundExchange, the broadcaster is started down the road. But, maintenance is required.

Under new rules promulgated by the Copyright Royalty Board (which was given authority to do this by the Copyright Office), broadcasters who stream must file quarterly reports with SoundExchange detailing at least two weeks' worth of programming so that SoundExchange can know how to divvy up the royalties that it receives.

The annual fee that is paid also varies wildly depending upon the number of performances that were made, the nature of the internet stream (commercial vs. non-commercial) and several other factors.

I have just outlined the very basics of streaming and the regulations that must be followed and this listing should by no means be used or interpreted as the only things that must be considered. As always, anyone wishing to begin streaming on the internet should consult a qualified attorney with background in copyright and specifically streaming so that they can evaluate the specifics of the situation.

Streaming is here to stay, and despite predictions of its sky falling down, so far it has managed to hang on. It is also likely that SoundExchange and the regulation of streaming will stick around, too. So, knowledge of the rules and an understanding of the nature of the issue is a must.

Streaming Right Into Trouble - Part I

This is the first in a two-part series on internet streaming and the copyright issues that go with it. This part will discuss the history behind the new streaming rules. The second part will discuss their application.

Part One

Twenty years ago, it was unthinkable that most people would have a personal computer let alone that they could listen to their favorite radio station - from anywhere in the world - live on their computer. The ability to do this is solely the gift of (or fault of) the Internet. The Internet is also what allows those stations to stream their feeds live to millions of new listeners who would never have heard the station unless they were driving through the area.
image: davidking
As with most things involving technological advances, though, the technology got far ahead of the law, in particular, the Copyright law. Broadcasters began streaming their feeds on-line well before Congress got around to trying to regulate it. But, regulate it did, mostly at the behest of the recording industry.

With the rise of the Internet as the premiere way to obtain new music or share music, the recording industry saw its CD sales decline. Prior to this era, the recording industry and the broadcasters had a mutually beneficial détente of sorts: the recording industry did not collect royalties from the broadcasters for the play of their songs (known as sound recordings in the Copyright Act) but reaped the benefits of increased record sales based upon radio play. When the Internet came along and people were able to download their favorite music or just listen to it on their computer, CD sales began to slide. So, one avenue the recording industry pursued to staunch the tide of lost profits was to turn to Congress .

The industry's concerns were partly addressed with the Digital Millennium Copyright Act which added the right to perform a sound recording via a digital audio transmission to the list of exclusive rights that are given to the owners of copyrights. What this meant is that someone, other than the owner of the rights in the sound recording - which is usually the record company - could not legally play a sound recording via a digital audio transmission unless they had a license to do so from the owner. The DMCA does provide a statutory license that automatically covers the broadcaster, but only when they can meet certain statutory requirements.

Congress gave the final authority to promulgate the regulations to implement this legislation to the Copyright Office. The Copyright Office, in turn, decided that on-line streams of broadcasts were digital audio transmissions under the DMCA and that the DMCA required these broadcasters to pay royalties to the copyright owners of the sound recordings that they play. Not surprisingly, this was an unpopular decision with broadcasters who sued the Copyright Office to obtain a different result. The courts sided with the Copyright Office, though, and the regulations remain today.

Next week: how the regulations work and the landscape for the future.