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By Purple Fox Legal

December 15, 2021

Entrepreneurs must know when they need a license to use another’s intellectual property

Not only is it essential to understand the exclusive rights surrounding your intellectual property, but you must also know the right time to obtain permission, called licenses, to use someone else’s intellectual property. To avoid infringing on another’s intellectual property rights and potentially getting yourself into legal trouble, become familiar with the types of intellectual property you are utilizing in your business and operation so you can properly obtain the correct licenses.

When Can You Use Another’s Copyrights?

For a general idea of when you can use someone’s intellectual property without permission, consider these questions:

1. Is the work covered by someone else’s copyright?

Check for any existing copyright of the work you’re considering. 

2. Is it even eligible for protection at all?

Certain things such as names, titles, slogans typically cannot be protected by copyright law. No copyright claim will exist for these works. 

3. Is the work in the public domain?

“Public domain” is the term used for copyrights that the Copyright Act no longer protects. There are several reasons why a copyright may no longer possess protection under the law. The statutory duration of the copyright may have expired, or the owner may have forgotten to renew its registration. Regardless, if the work is in the public domain, then you can generally use it.

Works Made For Hire

While copyrights typically belong to the original creator of a work, works made for hire do not. A work for hire may be created in two situations. 

One, a work for hire may be prepared by an employee within the scope of their employment. Two, a work for hire may be created when an employer commissions an independent contractor to develop an original work of authorship in a fixed tangible medium. It is best to get work for hire agreements in writing before any task to create the work begins. Under a work for hire agreement, the employer becomes the owner of the copyright as soon as the work exists, not the creator (employee or independent contractor).

4. If the work is eligible for protection and not in the public domain, is your intended use of the work already permitted?

Sometimes, licenses are not required even though the intellectual property you intend to use is still protected under law. However, these are unique situations that require some research. 

5. Do exemptions exist for your use?

For example, in some, but not in all cases, instructors aren’t committing copyright infringement when utilizing copyrights to teach others.

6. Is the work accessible for your use via a library subscription?

Because of their role in education, libraries are generally free to reproduce and distribute certain copyrighted material without permission from the copyright owner. 

7. Is the work available under a Creative Commons license?

Creative Commons licenses are a collection of works that can be copied, distributed, edited, remixed, and so forth within copyright law. However, it is important to read the license terms carefully before using such works.

8. If not permitted already, ask if your intended use constitutes fair use.

There are four main factors used when analyzing whether your intended use constitutes fair use:

a. Purpose/character of your use of the copyrighted work

Is your use of the work for commercial purposes? What about nonprofit education?

Nonprofit education purposes are far more likely to be viewed as fair use versus those who intend to use the work for commercial gain. 

b. The nature of the original copyrighted work

Utilizing creative or imaginative copyrighted works is less likely to be seen as fair use. Use of another’s unpublished works is also generally unlikely to constitute fair use.

c. The amount or substantiality of the portion of the copyrighted work you use

Quality and quantity are considered in fair use claims. If a large portion of the copyrighted work is copied by use, a finding of fair use is less likely.  

d. The effect of your use on the market value of the copyrighted work

Did your use of the copyrighted work create harm for the copyright owner? Did your copy cause displaced sales? The answer to these questions will determine the acceptability of fair use. 

If someone’s actions constitute fair use of a copyrighted work, that person can assert fair use as an affirmative defense. If successful, that person won’t be liable for copyright infringement. The fair use Doctrine is much more complicated than it seems, which is why it is better to ask an attorney whether a person’s actions are protected. Don’t assume. At the end of the day, if your use does not fall under fair use, then you must seek permission.

When Can You Use Another’s Trademarks?

Trademark law carves out specific exceptions that allow for certain uses of trademarks.

Some acceptable uses of another’s trademark include instances where you are not using the trademark as a mark, such as informational or editorial uses like commenting on a company for an article. This is because the First Amendment of the U.S. Constitution protects these uses.

Other instances that allow for the use of trademarks without permission exist in the context of comparison.

When Can You Use Another’s Publicity Rights?

Suppose you plan to use another individual’s name, image, likeness, voice, or other unequivocal features of a living or deceased individual. In that case, you usually need to obtain a right of publicity license to utilize that individual’s publicity rights.

The right of publicity is a state-based intellectual property doctrine that provides an individual’s right to control the commercial use of their unequivocally identifiable features.

The right of publicity is entirely different from the other types of intellectual property in that it’s largely controlled by state law. Thus, the specifics of obtaining permission and available remedies for infringement vary by state. 

Many states also recognize a post-mortem right of publicity. This means you generally can’t use a deceased person’s publicity rights for a commercial purpose. For example, you can’t sell Kurt Cobain shirts unless you have obtained written permission from his estate or heirs.

Right of publicity issues often come up in advertising matters for most businesses. However, most businesses do not recognize the different intellectual property rights involved in advertising and marketing campaigns. This exposes them to a great amount of liability and potential lawsuits. A recent right of publicity infringement case awarded nearly $10 million to the plaintiff. That’s a lot of Benjamins!

Because of the complexity involved in utilizing others’ publicity rights, it is important to consult with an attorney who specializes in publicity rights to ensure compliance with applicable laws. 

Entrepreneurs must know when to hire an attorney to conduct intellectual property clearances for their business activities.

To avoid issues, startups should always obtain intellectual property clearance opinions to make sure they will not be infringing on another’s rights. Sometimes for a startup, this is as easy, but many times the process can be much more complicated.  When planning your business, assess the risk of infringement. If your startup will involve significant capital investment towards the creation of your product or service, you should consider outsourcing your intellectual property clearance to an experienced intellectual property attorney to protect your investment.