How A Simple Copyright Registration Might Save Your Business

Author: John Monahon, Attorney & Counselor, Trusted Counsel (Ashley) LLC

You have finally gone live with a software program that you hope will be the “crown jewel” of your business. Unfortunately, soon after launch, you discover that one of your licensees has been embedding your software into their own product and distributing it to thousands of end users—all of which occurs outside the scope of the licensing agreement. This copyright infringement is costing you thousands, if not millions of dollars in lost revenue.

By now, you probably know that that the software is automatically protected under the U.S. copyright law without registration. But did you know that if you failed to register the copyright with the U.S. Copyright Office, you have eliminated key rights that could ultimately help you pursue (and win) against the infringing licensee? Many businesses don’t, which is why they are left fighting an uphill battle when their copyright is infringed upon.

The following are just a few of the key advantages of filing a copyright registration:

A copyright infringement action cannot be prosecuted in federal court without first obtaining federal registration. Amazing, but true. And since federal courts have exclusive jurisdiction over copyrights, you can see why this is important! Ultimately, the copyright owner is forced to register the copyright just to bring the lawsuit (coincidentally, this is about the same time the copyright owner kicks itself for not filing it to begin with).
If the copyright is registered timely, a copyright owner may be entitled to recover statutory damages and attorneys fees in the event of infringement. The statutory damages alone range from $500 to $20,000 per act of innocent infringement and up to $100,000 for willful infringement. If the licensing contract didn’t provide for increased royalties in the event of infringement or attorneys fees, these statutory damages provisions can be real lifesavers (sometimes literally) for a business. They are also extremely helpful where actual damages are hard to prove or calculate.
If the copyright is registered timely, the registration will constitute prima facie evidence of a valid copyright and shift the burden of proof to the opposing party. Essentially, the infringer will have to prove their “innocence”, which is always a more difficult task than the copyright owner having to prove the infringer is “guilty”.

In light of the importance of these benefits, it is amazing that more software developers do not register their copyrights. A copyright registration can be filed either online or by mail (the U.S. Copyright prefers online and offers lowered filing fees and faster processing times for those who do). The copyright office requires that each claimant for a copyright submit: (1) a completed and signed Form CO application, (2) a filing fee of $50 if by mail and $35 if online (and a $760 expediting fee to have it completed in approximately 15 days), and (3) deposit copies of copyright material.

In the hectic environment of developing and launching a software product, it is all too easy for a business to forget to register their copyright. But I hope the above helps explain that by taking the time, businesses can prevent some significant losses and better protect that “crown jewel” they worked so hard on developing.

John Monahon can be contacted at jmonahon@trusted-counsel.com or at 404-961-7614.