What it means
Copyright protects the expression of an idea rather than the idea itself, and it attaches automatically the moment a work is fixed in a tangible form. That means a photograph on a supplier's website, a paragraph from a competitor's brochure and a font file downloaded from a forum are all protected without any registration notice being visible.
Infringement is simply using that expression in a way reserved to the owner, such as copying, distributing, adapting or publicly displaying it. Businesses most often infringe by accident rather than design.
A marketing contractor drops a stock image into a campaign without checking the licence, a training deck reuses pages from a published manual, or a developer copies code from a public repository whose licence requires attribution or forces the wider project to be released openly. In each case the company that published the material is liable, not just the individual who made the choice.
Defences exist but are narrower than most people assume. Fair use or fair dealing can cover criticism, news reporting, research or parody, and it is assessed case by case on factors such as the purpose of the use, how much was taken and whether it damaged the market for the original.
Crediting the author, changing a small percentage of the work or using it non-commercially are not, by themselves, defences at all. Remedies vary by jurisdiction but generally include actual damages plus the infringer's profits attributable to the infringement, or a statutory amount per work in the United States where the work was registered.
Statutory damages there run from $750 to $30,000 per work, rising to as much as $150,000 per work where the infringement is found to be wilful. Courts can also order the material to be withdrawn, which is often the more damaging outcome commercially.
Managing the risk is mostly administrative. Keeping a register of licences with their expiry dates and permitted uses, requiring contractors to warrant that delivered material is original or properly licensed, running open-source licence scans on code, and training marketing teams on stock image terms will prevent the great majority of claims.
Once a demand letter arrives, the cost of settling is almost always higher than the licence would have been.
In practice
Real-world examples.
Example
A restaurant chain's social media agency posts a well-known song over a promotional video without a synchronisation licence. The rights holder issues a takedown and a settlement demand, and the chain pays a five-figure sum plus its own legal fees for a clip that ran for eleven days.
Example
A software company ships a product containing a library released under a licence requiring that any distributed derivative be published under the same terms. Discovering this during due diligence for an acquisition, the buyer reduces its offer until the library is replaced and the code rewritten.
Example
A consultancy builds a training course around chapters lifted from a published textbook and sells it to corporate clients. The publisher sues, the course is withdrawn mid-delivery, and the consultancy has to refund clients as well as settle the claim.
Formula
Calculation
Damages = Actual damages, typically the licence fee that should have been paid, + Infringer's profits attributable to the infringement. Alternatively in the United States: Statutory damages = Number of works infringed x Statutory amount per work.
A company uses 12 professional photographs on its website and in a brochure without a licence. The photographer's standard commercial licence is $450 per image, so actual damages are 12 x $450 = $5,400. The court also attributes $18,000 of the company's profit to the campaign that featured the images, giving total damages of $5,400 + $18,000 = $23,400. Had the photographer registered the works and elected statutory damages at $2,500 each, the award would instead be 12 x $2,500 = $30,000, and a finding of wilful infringement at $20,000 per work would produce 12 x $20,000 = $240,000.Case study
Seen in the real world.
Ashgrove Interiors is an illustrative, entirely fictional furniture retailer that rebuilt its website using a freelance designer. To fill the pages quickly the designer pulled 40 room photographs from image search results, and nobody at Ashgrove asked where they had come from because the invoice simply said design and imagery.
Eighteen months later a photo agency's automated image-matching service identified nine of its pictures on the site and sent a demand for $67,500, made up of back-dated licences and an uplift for unlicensed use. Ashgrove's contract with the freelancer contained no warranty about third-party rights, so there was nobody to pass the claim to, and it settled at $41,000 after negotiation.
The fictional company then did what it should have done first. It bought a stock library subscription for $2,900 a year, added a one-paragraph rights warranty to every creative contract, and kept a simple spreadsheet listing each asset, its source and its licence terms.
Watch out
Common mistakes.
- Believing that crediting the creator makes the use lawful. Attribution is a courtesy or a licence condition, never a substitute for permission to use the work.
- Assuming anything found through a search engine is free to use. Search results index protected works, and the absence of a copyright notice says nothing about whether the work is protected.
- Treating the contractor as the one on the hook. The business that publishes the material is generally liable to the rights holder, and can only recover from the contractor if the contract says so.
Questions
People also ask.
Does changing a work by a certain percentage avoid infringement?
No, there is no percentage rule, and an adaptation that keeps recognisable protected expression can still infringe even after heavy editing.
Is infringement a problem if no money was made?
Yes, commercial gain affects the size of the remedy but non-commercial use is still infringement, and injunctions and legal costs apply either way.
What should a business do when it receives a demand letter?
Preserve the evidence, take the material down while the position is checked, avoid admitting liability in early correspondence, and get specialist advice before responding on substance.
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