We love Creative Commons, but understanding the use of Creative Commons images can be tricky, because of the numerous licenses that attached to Creative Commons images. Each Creative Commons license has its own restrictions, and despite the fact that some licenses appear simple, in practice, it’s not necessarily apparent what a user can do with an image, and importantly, what they can’t. Because there are a number of different types of licenses attached to Creative Commons images, it is important to be rigorous about checking and complying with license terms prior to posting a Creative Commons image. To help, we’ve put together this intro to Creative Commons image use:

 Creative Commons Licensing Basics

Creative Commons licenses are divided into six main license categories or types. Each of one these six licenses can be modified to cover a variety of works, including text, ... Read More »]]>  

We love Creative Commons, but understanding the use of Creative Commons images can be tricky, because of the numerous licenses that attached to Creative Commons images. Each Creative Commons license has its own restrictions, and despite the fact that some licenses appear simple, in practice, it’s not necessarily apparent what a user can do with an image, and importantly, what they can’t. Because there are a number of different types of licenses attached to Creative Commons images, it is important to be rigorous about checking and complying with license terms prior to posting a Creative Commons image. To help, we’ve put together this intro to Creative Commons image use:

 Creative Commons Licensing Basics

Creative Commons licenses are divided into six main license categories or types. Each of one these six licenses can be modified to cover a variety of works, including text, images, video and so forth. Each of these license types are defined by the presence or absence of four unique clauses, which are then mixed and matched to produce four main types of Creative Commons licenses.

 License Terms:

Attribution

Each Creative Commons license has an attribution requirement, which mandates that anyone using a work give proper credit to the work’s original creator. Proper attribution typically includes leaving copyright notices intact, citing the author’s name (screen name, or other user identification), citing the work’s title or name, citing the specific Creative Common’s license the work falls under, and stating your work is a derivative, if it in-fact is.

 No Derivatives

A license which states, “No Derivatives” prohibits users from modifying, building upon, or transferring work. This means that using work in this category must be used exactly “asis” in its original form.  Importantly, you may still use the work any way you like if the use is considered “Fair Use.” This may mean being able to make derivative works for specific purposes. For example, typically fair use will include parodies, short excerpts, criticism, and commentary. Determining whether your use constitutes as fair use, however, may be difficult, and you should always seek the expert advise of an experienced attorney before proceeding.

 Non-Commercial

Creative Commons licenses with a non-commercial clause prohibits commercial use of the images. What is or isn’t “commercial use” is a difficult question, even though the seemingly simple definition states that noncommercial use is any use not “primarily intended for or directed toward commercial advantage or private monetary compensation.” To try to clarify the issue, Creative Commons has issued a 255 page report on the meaning of commercial and noncommercial use with respect to this license. Clearly the definition is insufficient. If there’s ever any question, again, you should consult an experienced attorney to provide guidance.

Share Alike

The “Share Alike” provision requires that anyone using a Creative Commons image to make a derivative work, must also license that work under the same Creative Commons license that was used for the original work.

 Mix & Match Licenses

Each Creative Commons license draws from the four clauses set forth above. All licenses have an attribution clause, and the remainder add on or more of the above clauses to make a license. The least restrictive license is the “Attribution License,” and the most restrictive is the “Attribution Non Commercial No Derivatives License,” which prohibits commercial use and the creation of derivative works.

A full list of the licenses can be found here.

If you have any questions as your use of Creative Commons Licenses, please consult an experienced copyright attorney. As always, you can contact us at (720)204-5671, or on our contact page, and we are happy to help.

Stay tuned for our next post, which will discuss how to find Creative Commons images….

The IRS will begin by assuming all of the people your company pays are employees because this is the default rule.  If you need to rebut ... Read More »]]> It is tax time, and if you run a small business this can be a daunting time.  One of the most important distinctions you may have to make is whether the people you have working for you will be classified as independent contractors or as employees.  Of late, the IRS has cultivated a keener level of scrutiny when it comes to small businesses because they are easier and quicker to audit.  In fact, the IRS recently announced that small business underreporting is responsible for 84% of the $450 billion tax gap.  In other words, if you are a small business, you need to make sure to cross your T’s and dot your I’s this year.

The IRS will begin by assuming all of the people your company pays are employees because this is the default rule.  If you need to rebut that presumption, you must illustrate a number of factors showing that the service relationship is in fact one of an independent contractor.  These factors are numerous and no single one is dispositive. The following can serve as a brief paraphrase: if the person you have working for you has their own company, and they contracted with you from their own letterhead, and signed on behalf of their own company, you should generally be set to call them an independent contractor.

If, on the other hand, the person you employ is using your office space, your printer, your pens and your paper, you may have an employee on your hands. Other determining factors include:

• the level of instruction the person receives from you;
• the continuity of your relationship;
• flexibility of schedule;
• requirements for reports;
• payment of business or travel expenses;
• control over discharge;
• and a few others located here.

The obvious and important distinction here is that employees are on the company payroll and the employer is required to withhold federal and state taxes, social security and Medicare. Employees are also eligible for other benefits such as sick leave, vacation, and a retirement plan, on top of unemployment and worker’s compensation. By law, employers need not provide any of these things to independent contractors so long as they are truly independent contractors. Also, if your company is dealing with an employee you need to ensure compliance with laws governing wages and hours as well as benefits and taxes.

Due to the multitude of test that may be applied depending on the specific facts, if this issue is unclear to you it is important to handle this classification with the advice of an attorney.

Work for hire is a doctrine under copyright law that gives an employer copyright ownership of a work prepared by an employee within the scope of her employment.  This doctrine can also apply, in limited circumstances, to works prepared by independent contractors.

If an employee creates a work within the scope of her employment, the employer is automatically entitled to the copyright of the work.  In these situations, there need not be a contract or agreement stating that the employer owns the rights to the copyright.  If you’re wondering ... Read More »]]> Artists, authors, creators, publishers, and freelancers of any type, this posting is for you.  The doctrine known as “work for hire” is an important legal concept that can serve to work in your favor, but if you’re not careful it can take away from your work product in ways you may not expect.

Work for hire is a doctrine under copyright law that gives an employer copyright ownership of a work prepared by an employee within the scope of her employment.  This doctrine can also apply, in limited circumstances, to works prepared by independent contractors.

If an employee creates a work within the scope of her employment, the employer is automatically entitled to the copyright of the work.  In these situations, there need not be a contract or agreement stating that the employer owns the rights to the copyright.  If you’re wondering whether or not you qualify as an employee, make sure to check out our upcoming post on what constitutes “scope of employment.”

On the contrary, in an independent contractor situation the US Copyright Act requires three conditions in order to qualify a product as a “work for hire.”  The conditions are these: (1) the works must be specially commissioned for a project; (2) a written contract must exist stating that the works produced are in fact “made for hire”; and (3) the works must fall within one of nine specific categories in the act.  These nine categories are:

1. a part of a periodical or collective work;
2. a part of a motion picture or other a/v work;
3. a translation;
4. a supplementary work (i.e., a forward, appendixes, etc.);
5. a compilation;
6. an instructional text;
7. a test;
8. answer materials for a test; or
9. an atlas

You may notice that this list doesn’t cover things like software and other technological creations like website development.  In order for a company to gain access to the copyrights for technological work products, a clear contract or copyright assignment is necessary.  Such an agreement should lay out exactly which intellectual property belongs to the creator, and which belongs to the author.

While it is wise to work with attorneys on copyright agreements such as that described above, another great solution is to get a hold of the Copyright Detectives. Joyce L. Miller and Dr. C. Dan Miller are two savvy, persistent copyright consultants who can help you track down the owner of a particular copyright, and help you gain permission to the use the right in your work.  Authors of Copyright Clearance for Creatives, Joyce and Dr. C. Dan Miller together are an incredibly helpful and thorough resource for anyone delving into this arena.  Cheers Copyright Detectives! Carry on!

The idea behind contract brewing is essentially outsourcing the physical brewing of the beer.  How it works is simple, a brewery pays to have its products brewed by a third-party brewery that has the ability to produce the extra batches.  The third-party brewery brews the beers for a fee, and the original brewery sells those beers under its own name and label.

While contract brewing ... Read More »]]> Following up on our Blog discussing Colorado’s favorable laws on breweries, we want to share a not-so-new concept that has interesting legal implications in the world of craft beer: contract brewing.  Contract brewing presents an advantage to micro- or nano-breweries that may not have the capital to establish and maintain a brick and mortar brewery.  It also is advantageous for those breweries who are looking to expand, or who have too much product and not enough equipment.

The idea behind contract brewing is essentially outsourcing the physical brewing of the beer.  How it works is simple, a brewery pays to have its products brewed by a third-party brewery that has the ability to produce the extra batches.  The third-party brewery brews the beers for a fee, and the original brewery sells those beers under its own name and label.

While contract brewing sometimes carries a stigma among the craft beer community, it can often be a huge help for those who need it.  Our own Prost Brewing, for example, is operating as a contract brewery for those local breweries who can’t keep up with the demand.

In order to set up a contract brewing situation you will need a written agreement between your brand and the third party brewery.  Your best ally in this working relationship will be a comprehensive, unambiguous, and reliable contract. In drafting this agreement, it is important to remember a few of these key provisions:

1. To protect your intellectual property rights, you should make sure that you start off with a trademarked brand name.  Get this in the works before you even think about contracting your brewing out to a third party;
2. Include a provision explaining that your brewery owns the rights to all of its intellectual property, and that by contracting out the brewing process you are not granting the third party brewery any of those rights;
3. Set a clear term for the contract. Establish definitive ways to terminate the agreement, as well as ways to extend it if desired;
4. Trade secrets: your brew recipe is important to you, remember to protect this as confidential information.  Make sure you establish what information is confidential, and provide for remedies if the confidentiality provision is breached, i.e. monetary damages;
5. Clearly lay out the duties and obligations of both parties: who will provide the packaging? Who will deliver the product and when? What about insurance and indemnities? How and when will payment be made? Will you test the product to determine if it meets your standards, or will they?

While this list is not a comprehensive answer to what your contract needs to encompass, it provides a handful of inclusions that will be helpful in protecting your business and your brand. This is intended to be informative, and is not legal advice. Every situation is unique and it is important to contact a professional to help you navigate through the nuances of contract law.

What is a Licensing Agreement and a Royalty?

As an artist you own certain intellectual property rights to your artwork (for more information see our page on copyrights). When you enter into a licensing agreement, you expressly retain ownership of your intellectual property, while giving someone else the specific rights (or permission) to use and/or sell your artwork (e.g. make reproductions on merchandise, publications, prints etc.). In exchange for permitting another to utilize your artwork, you will often receive ... Read More »]]> When licensing artwork, negotiating a good royalty deal is often imperative to capitalizing on your talents as an artist. Licensing agreements can be complicated and involve giving up, transferring or granting rights for another to use your intellectual property. While each license agreement is different, there are fundamentals and basic terms inherent in licensing agreements that every artist must understand before negotiating terms:

What is a Licensing Agreement and a Royalty?

As an artist you own certain intellectual property rights to your artwork (for more information see our page on copyrights). When you enter into a licensing agreement, you expressly retain ownership of your intellectual property, while giving someone else the specific rights (or permission) to use and/or sell your artwork (e.g. make reproductions on merchandise, publications, prints etc.). In exchange for permitting another to utilize your artwork, you will often receive a royalty, which is a continuing payment based upon a percentage of income from the use of the work. Both the specific permissions granted, and the amount or percent that you receive as a royalty should be specifically set out in the terms of the licensing agreement.

Licensing Terminology:

An artist must know the language or terminology customarily used in a licensing agreement to fully understand how they will receive royalty payments.

Advance against royalties: An advance is an up-front payment to the artist, which is typically paid at the time when the artist enters into the licensing agreement. Typically, an advance is credited against future royalty payments, unless the agreement states otherwise. For example, if you are paid a $2,000 advance against royalties at the time of signing a license agreement, the licensee (person using your artwork), will keep the first $2,000 in royalty payments (remember, they already paid you), in order to repay the advance.  After the first $2,000 in royalties earned, you would receive royalty payments pursuant to whatever terms had been agreed upon in the licensing agreement.  Importantly, the advance is usually nonreturnable or refundable. That is to say that if the company doesn’t generate enough profit to pay you  $2,000 in royalties, the artist does not need to return the advance, and rather the company (the licensee) absorbs the loss.

 One-time License Fee: Sometimes a licensee may pay you a one-time license fee when you sign the license agreement. This one time license fee is different from an advance in that it is not deducted from royalties. It’s also rarely used.

 Gross and Net Sales: “Gross Sales” denotes the total amount billed to customers who purchase the merchandise or product for which the licensee is using the licensed artwork. On the other hand, “Net Sales” are calculated based upon the gross sales minus certain agreed upon deductions (i.e. items which are deducted from sales before the royalty is calculated) such as cost of goods, returned product, promotional materials, shipping, packaging etc.  When negotiating a licensing agreement, it’s critical to figure out whether royalties will be paid based upon gross or net sales, what deductions are included, and how that calculation impacts the final amount that ends up in your bank account.

Calculating Royalties:

The calculation of royalties and percentages are terms negotiated between the parties in a licensing agreement. Usually royalty payments are computed by multiplying the royalty rate against net sales. Royalty percentages can be whatever parties are able to agree upon, but generally fall within the following parameters:

• Greeting cards and gift wrap: 2% to 5%
• Household items such as cups, sheets, towels: 3% to 8%
• Fabrics, apparel (T-shirts, caps, decals): 2% to 10%
• Posters and prints: 10% or more
• Toys and dolls: 3% to 8%

 Auditing Royalties:

An artist should always demand an audit provision in a licensing agreement. This provision allows for an artist to detect and quantify a error or shortcoming in royalty payments that they are receiving. An audit provision should permit the artist to access a licensee’s records, and if an error is uncovered, require that the licensee make up for the shortcoming, and pay for the cost of the audit.

Trade Dress

Trade dress is a form of trademark law that covers the general look and feel of a design.  In the fashion world, this can include the complete look of the design, the packaging, and how it is displayed in a store.

Infringement is possible under the trade dress doctrine when a third party creates such a similar overall feel and look with a design such that a customer may be likely confused as to the proper source of the design.  The law of trademarks and trade dress is designed to protect consumers from ... Read More »]]> Are fashion designs protected by intellectual property laws? Proponents of an amendment to the US Copyright Act are quick to say no; however, there are some protections that currently exist. As of now, the laws of trade dress and copyright (among others) cover various aspects of fashion design.

Trade Dress

Trade dress is a form of trademark law that covers the general look and feel of a design.  In the fashion world, this can include the complete look of the design, the packaging, and how it is displayed in a store.

Infringement is possible under the trade dress doctrine when a third party creates such a similar overall feel and look with a design such that a customer may be likely confused as to the proper source of the design.  The law of trademarks and trade dress is designed to protect consumers from this type of confusion.

The Supreme Court has held that the design is only protectable when it reaches a certain level of recognition with consumers, or if it has a secondary meaning.  A secondary meaning, in the eyes of the law, means that the design has a special significance to the public, beyond its design.  Trade dress and secondary meaning must be cultivated over time such that consumers come to associate it with the designer. Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 US 205 (2000).

Copyright

Copyright law, on the other hand, only currently protects portions of garments. Under the US Copyright Act, useful items are not eligible for protection, but prints, for example, or other patterns are eligible for protection.  Photographs of clothing and designers sketches are also protectable.

The existing standard for copyright infringement is whether there is “substantial similarity” between the protected portion of the designer’s copyrighted work and the infringing work.

The Amendment

While various amendments have been proposed to enlarge the scope of protection for fashion designs, the most pertinent of which is the Innovative Design and Piracy Protection Act (ID3PA).  This proposed amendment to the Copyright Act will allow for a three-year term of protection for “original elements or arrangements of fashion designs that are the result of a designer’s own creative endeavor.”  In order to achieve protection, these designs must provide a unique, distinguishable, non-trivial, and non-utilitarian variation over prior designs.

While the fashion industry could benefit tremendously from the amendment, the opposition argues that the bill may increase production costs and consumers may end up bearing that burden.

As a preliminary matter, all works subject to copyright protection are eligible for registration with the U.S. Copyright Office, and there are important advantages of doing so. The U.S. Copyright Office is an official repository for copyright applications, and all works whether or not published, may be registered. Additionally, registering works is relatively not expensive, and often times, groups of work can be registered simultaneously for one fee.

 So here’s the skinny on registration and depository requirements…

Registration:

The majority of works may be registered online (and those registering online even enjoy a reduced fee); however, certain kinds of registration including group registration, and copyright renewals require that specific forms be submitted in ... Read More »]]> While our last post addressed whether copyright registration is required to secure copyright protection and its advantages, this post will discuss the actual registration of works with the U.S. Copyright Office.

As a preliminary matter, all works subject to copyright protection are eligible for registration with the U.S. Copyright Office, and there are important advantages of doing so. The U.S. Copyright Office is an official repository for copyright applications, and all works whether or not published, may be registered. Additionally, registering works is relatively not expensive, and often times, groups of work can be registered simultaneously for one fee.

 So here’s the skinny on registration and depository requirements…

Registration:

The majority of works may be registered online (and those registering online even enjoy a reduced fee); however, certain kinds of registration including group registration, and copyright renewals require that specific forms be submitted in paper form.

As reflected in the reduced fee, the U.S. Copyright Office prefers registration to be made through its electronic office, also known as eCO. The online registration of one work requires a $35 application fee, which can be paid via credit card, or direct transfer from a checking account. The eCO system permits users not only to pay for the registration online, but also track their registration and submit work for deposit.

Additionally, the U.S. Copyright office provides the Form CO to registrants. This form supplants previous specialized forms such as the Form VA. Form CO, and designed to be filled out electronically, printed, and submitted via hardcopy to the U.S. Copyright Office.  Prior to the eCO and Form CO, there were specialized forms for visual or written works (VA and TX) that were available via mail, and only by written request to the U.S. Copyright Office.  These forms are also now available for download online.

Important for those seeking group registration, neither eCO or Form CO are designed for group registration—though certain types of group registration is possible through use of these forms. For the types of group registrations that cannot be done via eCO or Form CO, the registrant must resort to traditional paper application forms.  Specifically, a group of unpublished works may be made under a single title with one registration fee assessed, thus avoiding individual registration for each work, and drastically reducing the cost of registering.  There is no limit on the number of works that can be included in the collection; however, certain legal requirements must be met to qualify for group deposit.  Additionally, there is a separate procedure for registering groups of published photographs. Specifically, for a single photographer may register up to 750 works (photographs), if taken within a 12 month period, by paying one single fee using forms VA and Gr/PPh/CON.  The Gr/PPh/CON form must be mailed with copies of prints, slides, photocopies, or CD/DVD-ROM.  A photographer can register up to 750 unpublished photographs in a single application by using the VA and accompanying Form CON.

Deposit with the U.S. Copyright Office:

Along with the registration form(s) and fee, one complete copy of an unpublished work or two copies of a published work must be sent to the U.S. Copyright Office.  The U.S. Copyright office requires the “Best Edition,” to be submitted, and sets out specific regulations as to what it considers being the best.  Circular 40a on the U.S. Copyright Office’s website, provides a helpful guide in understanding deposit formats and requirements. Alternate Deposits may also be available.

Deposit for the Library of Congress:

In addition to providing copies for purposes of copyright registration, copies of works may also be deposited for the Library of Congress for works that were published in the United States on or after March 1, 1989. Certain works may be exempt from deposit, which for example include 3D sculptural works, greeting cards, postcards, works published on dolls, toys, plaques and so forth.  Notably, the deposit with for the Library of Congress in no way affects the copyright protection for qualifying works.

Need extra help? Have questions? Give us a call today, and we can educate you on the registration process and register your copyrights for you.