A simple copyright notice (e.g., “© [Year of First Publication] [Owner]”) on a website can imply an assertion of ownership in individual elements of the website and constitute “copyright management information” under the Digital Millennium Copyright Act (DMCA), a Texas district court held.  A Texas investment company learned this lesson the hard way when it removed the copyright notice from an image, used the modified image on its website without authorization, and was subsequently ordered by the court to pay enhanced damages for willful copyright infringement and statutory damages for violating the DMCA.

The original image at issue, a graphic juxtaposing two road signs, was created by a graphics company in Texas and federally registered with the U.S. Copyright Office.  In 2012, the graphics company discovered an unauthorized copy of the image on the investment company’s website.  The image had been stripped of the copyright notice that was part of the original image such that the investment company’s notice of copyright ownership at the bottom of the webpage was the only copyright information associated with it.

The graphics company filed a complaint alleging willful copyright infringement under the Copyright Act and a violation of Section 1202 of the DMCA, which prohibits the intentional removal or false provision of “copyright management information.”  The investment company failed to respond, earning a default judgment against it in John Perez Graphics & Design, LLC v. Green Tree Investment Group, Inc., 2013 U.S. Dist. LEXIS 61928 (N.D. Tex. May 1, 2013).

The court awarded the graphics company enhanced damages for willful copyright infringement totaling $7,500, finding evidence of willfulness in the investment company’s removal of the copyright notice and use of the modified image on a webpage containing the investment company’s own copyright notice, which the court determined constituted an assertion of ownership of the image.  While the amounts at stake were relatively small for copyright infringement, under different facts the exposure could have been much greater.

Further, the court held that the investment company’s removal of the original copyright notice and substitution of its own constituted the provision of false copyright management information in violation of the copyright management provision of the DMCA.  17 U.S.C. § 1202.  This determination supported an additional award of $10,000 in statutory damages under the DMCA civil remedies provision, 17 U.S.C. § 1203, which allows for an award of up to $25,000 for each violation.

This double whammy might have been subject to challenge had the investment company litigated the issue, as there is disagreement in the federal courts as to whether a simple copyright notice constitutes “copyright management information” within the meaning of the DMCA. For an in-depth discussion of the issue, see Susuk Lim, A Survey of the DMCA’s Copyright Management Information Protections: The DMCA’s CMI Landscape after All Headline News and McClatchey, 6 Wash J.L. Tech. & Arts 297 (2011). As discussed in that article, some courts have limited the application of the DMCA copyright management provision to information that is part of a digital rights management technology.

The potential for simple copyright notices to constitute copyright management information raises a question for further thought:  As Section 1202 of the DMCA does not explicitly make an exception for fair use, would the removal or alteration of copyright management information in a context that constitutes “fair use” under Section 107 of the Copyright Act still run afoul of the DMCA and trigger statutory penalties?

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Photo of Wai Choy Wai Choy

Wai Choy has deep expertise in technology, media and intellectual property-related transactions and counseling and is a partner in Proskauer’s Corporate Department, Technology, Media & Telecommunications (TMT) Group, and Blockchain & Digital Assets Group. He is recognized as a trusted advisor to asset…

Wai Choy has deep expertise in technology, media and intellectual property-related transactions and counseling and is a partner in Proskauer’s Corporate Department, Technology, Media & Telecommunications (TMT) Group, and Blockchain & Digital Assets Group. He is recognized as a trusted advisor to asset managers, operating companies and other enterprises at various stages in their development and across industries, including technology, technology-enabled services, media, financial services, e-commerce, sports and healthcare.

In the context of private equity, mergers, acquisitions and financings, Wai:

  • Structures and negotiates key transaction documents, such as purchase, merger, transition services and intellectual property license agreements;
  • Leads teams in conducting legal due diligence and provides industry-specific market insights;
  • Advises clients on technology, intellectual property, privacy and data security matters; and
  • Represents portfolio companies pre-sale or post-acquisition in their business operations, including key commercial transactions and strategic agreements.

Wai also helps operating companies navigate legal and business matters in their day-to-day business operations and leads the structuring, drafting and negotiation of a wide range of contracts, such as:

  • Service agreements for a variety of services, including outsourcing, software as a service (SaaS) and other hosted services, data analytics, digital marketing, software and website development, systems integration, technology implementation and payment processing;
  • Collaboration agreements between strategic partners for the development, manufacturing and commercialization of new technology, products and services;
  • Software license agreements and other complex intellectual property license and assignment agreements;
  • Revenue sharing, joint venture, reseller, supply, equipment purchasing, manufacturing and other types of general commercial agreements;
  • Content production, license and distribution agreements covering various business models and distribution methods;
  • In the biotech, pharma and medical device arena, agreements covering research and development collaborations, intellectual property licenses, manufacturing, supply and distribution services, sponsored research, grants, revenue sharing and other strategic partnerships among commercial entities, academic institutions and/or charitable organizations;
  • Terms of use, privacy policies and end user license agreements for websites, mobile apps and other software; and
  • Advertising-related agreements spanning digital, radio and billboard media, including programmatic advertising platform agreements, lead generation service agreements, advertising reseller and affiliate agreements, insertion orders and advertising terms and conditions.

Wai serves as Co-Editor of Proskauer’s Blockchain and the Law blog and counsels business and legal teams on blockchain and distributed ledger technology development, structuring and implementation, cryptocurrencies, non-fungible tokens (NFTs), fan tokens and other digital assets, and associated legal issues.

Prior to joining Proskauer, Wai worked in the Business & Legal Affairs departments of Marvel Studios in Los Angeles and Marvel Entertainment in New York. At the University of Pennsylvania Law School, Wai served as Senior Editor of the University of Pennsylvania Law Review and was a Levy Scholar.