Imagine one morning you arrive at work only to be greeted by a summons and a lawsuit accusing your company of copyright infringement because one of your employees was caught copying and pasting articles from news websites and e-mailing them to colleagues for use in connection with company projects.

In disbelief, you ask yourself: “How could this happen at my company?” The answer is simple: While technological advancements allow for the easy reproduction and distribution of material with the mere click of a button, that very simplicity causes many people to lose their appreciation for the legal implications of their actions. In fact, such activities may be prohibited under U.S. copyright law, and yet they are extremely common, especially in the workplace, where they can create significant liability issues for businesses.

U.S. copyright law derives from the Constitution and is intended to promote the arts by providing authors with certain exclusive rights in their original works of authorship, including the rights to reproduce, distribute copies, display and create derivative works.

Those rights, however, are not without limitation. In particular, the doctrine of fair use, codified in Section 107 of the Copyright Act of 1976, is a defense to a claim of copyright infringement and allows for certain limited uses of copyrighted works that might otherwise be infringing.

The four primary factors considered in determining whether a particular use of a copyrighted work qualifies as fair use are (1) the purpose and character of the use, including whether the use transformed the underlying work by adding new meaning and expression; (2) whether the copyrighted work is factual or creative; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. The fair-use inquiry requires careful consideration of the facts of the particular case.

Following is a variety of day-to-day workplace activities that could be copyright infringements, and an exploration of whether the doctrine of fair use shields your company from liability for those activities.

Of course, if your business has licenses in place that allow your employees to use materials in a particular way, those licenses will be the main consideration in determining whether a particular use is acceptable. However, if you do not have a license, the use may nonetheless be protected by the fair-use doctrine.

While these examples provide some general understanding as to the legal treatment of certain activities, it is strongly recommended that copyright counsel be consulted prior to engaging in such activities, as the fair-use inquiry is very fact specific.

Scenario 1

A company manager creates a PowerPoint presentation for an internal company meeting regarding a product or service offered by the company. To enhance the presentation, she copies a news wire photograph of the Boston skyline from a website and pastes it into one of the slides.

Legal implications: The complete, unaltered reproduction and display of a copyrighted photograph may not qualify as a fair use. More likely than not, the copyright holder’s business model depends on licensing his or her images.

Unauthorized reproduction and use may abrogate the licensing market for the photograph, thus hurting the market for the copyrighted work. To avoid potential liability for copyright infringement, the manager can either obtain permission or a license to use the copyrighted photograph from the copyright owner, select a photograph that the company has the right to use, or take her own photo to use in the presentation.

Scenario 2

An employee with a lively sense of humor takes from the Internet a copyrighted photograph of famous Red Sox player David Ortiz at the 2004 World Series and, using Photoshop, inserts into the photograph an image of your company’s CEO, a notorious Yankees fan, smiling with his arm around Ortiz.

To add levity to an otherwise routine company-wide meeting, the employee inserts the modified photograph into the meeting’s PowerPoint presentation. The photo collage is not used to promote any product or service offered by the company.

Legal implications: Unlike the example in Scenario 1, here the employee’s changes to the Ortiz photograph added something new to the original copyrighted work, altering its character and purpose, and turning it from a documentation of an important moment in baseball history into a humorous device used to liven an otherwise serious meeting.

By transforming the original photograph and adding new meaning and creative expression, and because there is no link to a product or service, your company is more likely to have a viable fair-use defense.

Scenario 3

An employee finds an article of interest on a news website. He copies the text of the entire article into an e-mail and sends it to other company employees for the purpose of increasing his fellow employees’ understanding on the article’s topic. He fails to include the copyright notice at the bottom of the web page.

Legal implications: This act of copying and distributing the article may be considered copyright infringement and not fair use for the same reasons discussed in Scenario 1. Failing to include the copyright notice also may make your company vulnerable to a claim of willful infringement.

Scenario 4

An employee finds an article of interest on a news website. He copies only a single paragraph from the article into an e-mail and sends it to other company employees for the purpose of increasing his fellow employees’ understanding on the article’s topic.

Legal implications: A general conclusion as to this scenario is impossible due to an infinite combination of facts that may be brought to bear. While, in general, as the amount of copyrighted material used decreases, the likelihood that the use will be considered a fair use increases, the ultimate conclusion depends largely on the importance of the copied portion to the value of the work as a whole. If the portion used constitutes the “heart” of the original work, meaning that it is the most significant or memorable portion, it will likely weigh against a finding of fair use.

Another relevant factor is the nature of the article itself. Works that are more factual in nature are generally afforded weaker copyright protection than those works that are more creative (e.g., analysis and fiction).

Thus, fair-use protection is more likely when the paragraph copied was more factual than analytical, though the ultimate decision will rest on the specifics of the article in question.

Scenario 5

Your company subscribes to various industry publications and circulates them among employees to be read. An employee then photocopies an article from one of the circulated publications before passing it along to the next recipient on the list for the convenience of keeping it in her archive of articles that might eventually be relevant to her work.

Legal implications: Circulation of such copyrighted publications is permissible and non-infringing. However, the act of photocopying an article from the publication will likely be considered an infringement of the copyright in that particular article.

Because the individual copyrighted article was copied in its entirety, and primarily to avoid the need to purchase an additional copy of the circulated publication or a reprint of the individual article itself, the act of copying affects the market for the work and is not a fair use.

On the other hand, if the purpose of making the copy was to avoid damaging the original publication, such as by taking the article into a lab where it might get exposed to chemicals, the copying might be considered a fair use.

Scenario 6

Your company purchased a software license that permits the installation of a computer program on 250 computers. However, your IT department used hard-disk imaging to install the program on all 500 computers at your company, simply to ease the burden of conducting manual, machine-by-machine installations.

Legal implications: In this example, based on an actual case, the company had exceeded the scope of its license, a clear infringement of the copyright in the software.
Interestingly, while this scenario does not appear to fall into the fair-use context, a fair-use defense was asserted in the case.

The defendant installed the program on twice as many computers as the license allowed, but it limited the number of concurrent users of the software to the number of permitted installs. The defendant argued that its excessive installation merely permitted the broadest and most efficient use of its license and, because it limited the number of concurrent users, its use was a fair use.

The defense was rejected, however, largely because the defendant’s excessive installation of the software avoided the expense of purchasing additional licenses, rendering it a commercial use that could negatively impact the market for the plaintiff’s product.

Fact specific

In addition to licensing individual copyrighted works as suggested for the photo in Scenario 1, your company might consider taking advantage of licensing programs offered by entities that license copyrighted works on a broad scale to head off any infringement issues.

There are a number of ways that a copyright owner can learn about a company’s infringing activities, even if they are internal. For example, internal e-mail messages might be forwarded to individuals outside of the company, or company materials might get posted to a publicly accessible website. Or a disgruntled employee may blow the whistle on a former employer and inform the copyright owner of a violation.

The fair-use analysis under copyright law is very fact specific, and a conclusion as to whether a particular use will be deemed “fair” may hinge on a number of factors. As such, it is strongly recommended that experienced copyright counsel be consulted before engaging in any potentially infringing activities.

Jonathan M. Gelchinsky and Katherine L. Staba practice at Finnegan, Henderson, Farabow, Garrett & Dunner in Cambridge, Mass.