3.4 Commercializing/Licensing Copyright-protected Material

3.4.1 Copyrightable Material and Copyright Protection

In the United States, copyright is a form of IP law that protects original works of authorship including literary, dramatic, musical, and artistic works, articles, studies, reports, programs, computer software, and architecture.

Copyright (or author’s right) is a legal term used to describe the rights that creators have over their literary and artistic works. Copyright does not protect facts, ideas, systems, or methods of operation, although it may protect the way these things are expressed.

3.4.2 Exceptions to the Rule

Copyrights are generally owned by the people who create the works of expression, with some important exceptions:

• If a work is created by an employee during their employment, the employer owns the copyright.
• If the work is created by an independent contractor and the independent contractor signs a written agreement stating that the work shall be “made for hire,” the commissioning person or organization owns the copyright only if the work is:
  1. a part of a larger literary work, such as an article in a magazine or a poem or story in an anthology;
  2. part of a motion picture or other audiovisual work, such as a screenplay
  3. a translation;
  4. a supplementary work such as an afterword, an introduction, chart, editorial note, bibliography, appendix or index;
  5. a compilation;
  6. an instructional text;
  7. a test or answer material for a test; or
  8. an atlas

Works that don’t fall within one of these eight categories constitute works made for hire only if created by an employee within the scope of his or her employment. (To clarify the IP situation, in such a written agreement, the work to be done should be classified within one of the eight categories above).

If the creator has sold the entire copyright, the purchasing business or person becomes the copyright owner.

People are familiar with the TM “mark” (™) which indicates that the term is formally approved by a national government as trademarked; and the © and ® marks which give notice that the terms are Copyright protected (c), and government registered (r) as Trademark protected.

Most institutions require that employees disclose in writing their inventions which may be later protected by patent or copyright protection. In most cases, there is no consequence for lack of disclosure and lack of use.

3.4.3 Fair Use

Like patents, fair use is a U.S. legal doctrine that promotes freedom of expression by permitting the unlicensed use of copyright-protected works in certain circumstances. Section 107 of the Copyright Act provides the statutory framework for determining whether something is a fair use and identifies certain types of uses—such as in criticism, comment, news reporting, teaching, scholarship, and research—as examples of activities that may qualify as fair use. Section 107 calls for consideration of the following four factors in evaluating a question of fair use:

• Purpose and character of the use, including whether the use is of a commercial nature or is for nonprofit educational purposes: U.S. courts look at how the party claiming fair use is using the copyrighted work, and are more likely to find that nonprofit educational and noncommercial uses are fair. 
• Nature of the copyrighted work: This analyzes how much the work that was used relates to copyright’s purpose of encouraging creative expression.
• Amount and substantiality of the portion used in relation to the copyrighted work as a whole: Here, courts look at both the quantity and quality of the copyrighted material that was used. If the use includes a large portion of the copyrighted work, fair use is less likely to be found; if the use employs only a small amount of copyrighted material, fair use is more likely.
• Effect of the use upon the potential market for, or value of, the copyrighted work: Here, courts review whether, and to what extent, the unlicensed use harms the existing or future market for the copyright owner’s original work.

Many U.S. universities waive their ownership rights for “academic creative works.” Such works are created through the research or creative efforts of the individuals to be judged by their peers and thus advance their research careers, as opposed to being commercialized by corporations for other users.