Defending Copyright Infringement Claims | What To Do When You Receive A Cease And Desist Letter

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Defending Copyright Infringement Claims | What To Do When You Receive A Cease And Desist Letter

Defending copyright infringement claims can be challenging. In this article we explore the most common types of copyright infringement, the possible consequences, what happens if an infringement was unintentional, and what to do first when you receive a cease and desist copyright infringement letter.

Received a letter accusing you or your business of
copyright infringement?

Defending copyright infringement claims successfully can be tricky, so you’re best off getting specialist legal advice from an intellectual property lawyer. We first determine if there has been any actual copyright infringement. Sometimes we find that there is no case for infringement however, in the event your business could be liable, we determine a strategy to resolve this issue in a timely manner, with the goal of minimising any financial and reputational consequences.

It is not uncommon for us to work with businesses that have received a cease and desist from, for example, a software company accusing them of downloading unlicensed software. This is usually an unwelcome surprise to the recipient because they know they have purchased the software in question. What may transpire is that employees or contractors downloaded unlicensed copies of the software rather than going through the correct process of acquiring another licence. 

Another common instance we see is when business owners with websites are accused of copyright infringement. They are often blindsided by the infringement because, for example, they hired a third-party copywriter to write the content for their website, unaware that part of it had been copied from elsewhere.

These are not the only examples of copyright infringement, but they are common ways in which businesses are inadvertently put at risk of copyright infringement, through the actions of employees, contractors or third-parties. We explore more ways in which businesses can be found to be responsible for copyright infringement, throughout this article.

The very first thing to know is that these letters should never be ignored, even if you believe it is unwarranted. 

Copyright

Copyright is a bundle of automatic rights which protects the use and copying of certain literary, dramatic, musical or artistic works without the copyright owner’s permission. Copyright infringement occurs when someone shares, uses or copies an original work without the copyright owner’s permission. 

The owner of copyright is usually the author or creator of the work or their employer. This can be varied by agreement. The owner of a copyright work has the exclusive rights to reproduce the work, publish the work and communicate the work to the public, for example by posting it online.

Examples of works that have copyright protection include photographs, drawings, articles, songs and computer programs.

Common Examples Of Copyright Infringement

Copyright infringement takes place when someone uses or copies an original work without the copyright owner’s permission. Some examples where your business may be liable for copyright infringement include:

  • An employee or third-party contractor posts a photograph of the Sydney skyline to your business’s Instagram account that they sourced online, without the image owner’s permission.
  • 30 employees/contractors share five user accounts (licences) to access software.
  • Copies made of software across devices that do not equal the number of licences purchased.
  • Someone takes a photograph of a product you sell or your shopfront, and you use the photograph on your social media account without their permission.
  • You engage a graphic designer to create an image for you to put onto products for you to sell online, but the designer, without your knowledge, has copied someone else’s artwork.
  • Some of the content on your website, written by an employee or third-party, has been copied from, or is very similar to content from another website.

Copyright infringement is also not uncommon if you own a marketplace or platform where other people sell products or post content. It is the responsibility of the marketplace or platform to put in place rigorous measures to ensure that no infringement takes place.

Possible Consequences of Copyright Infringement In Australia

The consequences for copyright infringement are varied. For example, in the event your business had not purchased the correct number of software licences, the software company may argue that you have used their products commercially so not only do they want you to pay retrospectively for the license fees, but they may also want additional compensation for commercially exploiting their software. In the example of a business engaging a graphic designer to create an image to put onto products to sell, the original artist can sue you for the profits made from the sale of the infringing artwork. It is not uncommon for business owners or management to tell us that they know nothing about the copyright infringements the business has been accused of.

What if the infringement was unintentional?

In the event that there has been an infringement, regardless of whether you as an owner were unaware of it, or it was unintentional, the business can still be liable in certain circumstances. Equally, if the infringement was made by a contractor or third-party contractor, your business may still be liable, depending on a number of factors such as the measures you have in place to ensure compliance.

Innocent Infringement

Many businesses are surprised to learn that innocent infringement is not a complete defence to copyright infringement, although it does impact on the remedies available to the copyright owner. Damages cannot be awarded against an innocent infringer. However, to qualify for this protection against a damages claim, and to prove innocent infringement, you need to show an actual subjective lack of awareness that you were infringing copyright and that, objectively considered, you had no reasonable grounds for suspecting that the work was infringing. However, an innocent infringer can still be ordered to pay what’s called an “account of profits”, being the profits they have made from dealing with the infringing work, as well as the copyright owner’s legal costs.

“Authorisation” of Infringement

Courts will also regard the “authorisation” of an infringement of copyright as a direct infringement of copyright. For example, a business that does not properly manage the way that its employees download and acquire software may find itself liable for authorising infringement. Whether or not you’ve authorised the infringement is decided by the Court by looking at the following factors:

  • the extent (if any) of the person’s power to prevent the doing of the act concerned;
  • the nature of any relationship existing between the person and the person who did the act concerned; and
  • whether the person took any reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.

This is often relevant for businesses that run online marketplaces where third parties are uploading content, and it is difficult to determine whether content is original or copied.

What to do when you receive a cease and desist letter or letter of demand

The very first thing you should do when you receive a cease and desist letter accusing you or your company of copyright infringement is to seek specialist legal advice.

  1. As mentioned earlier, do not ignore the letter. Not only could this force the other side’s hand and potentially lead to costly legal action that could have been avoided, it also puts you at risk of an additional damages award. If the letter demands that you respond within a few days, before you have had a chance to get advice from your lawyers, have your lawyers send a ‘holding letter’. This letter lets the lawyers on the other side know that you have received the letter and will be responding to it. You want to avoid their lawyers proceeding to Court because they have not received a response to their initial letter with their proposed deadline.
  2. Do not respond to the letter yourself before you have sought specialist legal advice. You could end up making concessions or admissions based on a misunderstanding of the law, and this could seriously jeopardise your case. In many cases, it is possible to resolve the dispute quickly by negotiating a commercial outcome, such as taking out licences for all the software copies that were downloaded unlawfully.
  3. Do not try to destroy any evidence. This always backfires and will only jeopardise your position further and potentially cost you a lot of money and an additional damages award.
  4. Undertake an audit – e.g. if the allegation states that your website has copied parts of theirs, have a full audit of your website to see which parts are similar so that you can instruct your lawyers properly. If you’re accused of downloading software unlawfully, ask your IT team to take a full, company wide inventory to see how many copies have been downloaded historically. If the infringement claim arises from the conduct of a third party you contracted with, for example, a copywriter, locate and review the contract to see what undertakings and indemnities were granted by the independent contractor. You will need all of this information to provide to your lawyers who will try and negotiate the best outcome for you.

When selecting a lawyer to support you with your copyright infringement response and strategy, it is wise to seek advice from a lawyer who works exclusively in intellectual property law. They should have experience on both sides of these matters, and work in this area of law daily, so you can be confident you are receiving up-to-date advice and maximise the chances of getting this matter resolved promptly. When defending copyright infringement claims you are looking for strategic advice about how to respond to the letter of demand. You need to learn early on if you are truly at risk of being held liable, what the liability is, and be given strategic advice about how to respond. How you respond can significantly impact your ability to defend the matter. Your response also potentially exposes you to further damages claims, so expert advice is essential.

Related: What Should You Do When You Receive A Cease And Desist Letter From A Lawyer?

As a boutique intellectual property firm servicing clients across Australia, we know that businesses of all sizes can find themselves inadvertently having to deal with copyright infringement matters. We are Brigit Rubinstein and Zan Lee, intellectual property experts who specialise in both copyright protection and copyright infringement for startups, small and big businesses. Book a complimentary initial call to discuss your needs here.

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