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ROCKIN' THE LAW

copyright

How do I copyright my music? I am asked that question more times than I can count. The short answer is that a creative work is actually “copyrighted” upon creation. So, if you have written out your lyrics (and/or the notes/chord progression), or recorded your song, it already is “copyrighted.” Pretty simple, isn’t it?

But life usually isn’t as simple as it seems . . . and what most people are really asking when they pose that question is - “How do I best protect my music from being stolen or being used without my permission or without paying me?” My best answer to that question is by registering your work with the U.S. Copyright Office. Registering your work is relatively inexpensive and provides the legal benefits that most people are seeking when they are asking about copyright.

Among other benefits, formal copyright registration may permit the copyright owner to recover statutory damages of up to $150,000 for willful (intentional) infringement, and the potential to recover attorney’s fees if you win your case. The ability to obtain statutory damages and to be reimbursed for your attorney’s fees also can make any “good” case a whole lot better for both you and your attorney; and can even help determine whether it’s really worth it to pursue a copyright infringement lawsuit. For these reasons alone, I usually recommend Artists take the time and pay the nominal fees to register their work – or hire someone to do it for you.

If your work is not registered before a dispute arises, any recovery you can obtain likely will be limited to “actual damages” - which is measured either by the amount you can prove you lost as a result of the infringement, or the profits made by the infringer. Proving either of these things is often difficult and sometimes impossible and, in doing so, you may have to hire experts which is very often cost prohibitive. Lawsuits can get real expensive . . . real quick. Think about it, what good is it to pay as much as $5,000 - $10,000 in expert fees, plus attorney’s fees and costs, to find out that you can only recover about $2,500.00 in actual damages.

And now, a quick five-cent lesson in attorney billing practices. Attorneys usually charge for services in one of three ways – as a flat fee for certain services, through regular hourly billing (usually with a retainer required up-front), or on a contingency basis. For the most part, a flat fee won’t work for an infringement claim because the scope of the work to be done is often too difficult (or even impossible) to predict and using a flat fee can be too risky for both the client and the attorney. If the fee is too high the client pays too much, too low and the attorney makes pennies per hour – which quickly becomes a disincentive to giving a case priority.

The regular hourly billing method, with an up-front advance against fees (a.k.a. - a retainer), definitely works in a copyright infringement situation. In a “perfect world” this method is the “fairest” because the client gets precisely what he is paying for, and the attorney is relatively assured that they will actually get paid for the work they perform – win, lose, or draw. But, of course, this is not “a perfect world” and you may not have an extra $2,500, $5,000, or $10,000 lying around to pay an attorney just to take your case and get things started – and yes, you really are looking at numbers like these.

The contingency fee basis may be the most viable method for both the client and the attorney, but you must have a really good case and a high probability of success – not just in your own mind, but in the attorney’s professional opinion. And there must be a chance of a substantial recovery. In a contingency matter, attorneys typically receive 33 1/3% (one third) of any recovery, plus reimbursement of any out of pocket costs, if the matter settles before the need to file an actual lawsuit. The attorney’s percentage usually increases to 40%, plus costs, if a suit must be filed. The reason for such high percentages is simple - in a contingency case, the lawyer bears most of the risk because the client usually pays nothing up front and often doesn’t pay anything unless and until the case settles or is won at trial. So, the attorney invests his time, skill, and resources on a mere possibility that the case will settle or will be won at trial. If the case doesn’t result in a substantial settlement or jury award, the attorney has basically worked for free, which usually isn’t worth the risk.

Imagine that you can prove actual damages of $100K, because that’s either what you lost or what the bad guy gained. First, take out the 33 1/3% (because your lawyer is a hell of a guy and decided not to claim the full 40% to which he is entitled under your agreement), and you’re down to $67K. Next, deduct the costs of the litigation (filing fees, postage, service of process, etc.) of say $1,000. And don’t forget about your forensic accountant (or other expert) who examined your accounting files and the infringer’s books and records at a cost of $5,000 (not an unreasonable or unusual amount and usually required upfront). Now you’re at $61K and while that may sound like a lot of money, YOU LOST $100,000.00! What if you can only prove $10K in actual damages? You can do the math, but I don’t know many attorneys that will spend possibly years litigating any case through a trial if their compensation will be only about $4K.

Now enter the attorney’s fees recovery provision of our beloved copyright law. In most cases, your attorney’s fees amount will be added to your judgment – meaning that if you are awarded the statutory damages of $150K, and you incurred 50K in attorney’s fees (i.e. - through a 1/3 contingency fee agreement) plus another 10K in costs related to the suit, your total judgment could be for $210,000. This means you get to keep the full $150,000 dollars in damages that you were awarded and your attorney and experts get paid. Worth the $35.00 in copyright registration fees, and probably whatever else you may have paid, isn’t it?

But can’t I just mail the song to myself and not open the envelope?” I hear that one a lot as well. This concept of the so called “Poor Man’s Copyright” is not found in the Copyright Law, and it is not a legitimate substitute for formal registration. And for the potential benefits you may receive, it usually just makes sense to register your work.

Get it? Your work is copyrighted on creation and fixation to a tangible form, but your best protection and potential for recovery of damages comes through the formal registration of the work with the U.S. Copyright Office. Plus, you will be required to register your work in order to file the lawsuit in the first place (but may or may not necessarily be entitled to those statutory damages and/or attorney’s fees). And, you get a cool certificate that you can hang on your refrigerator for all your friends and family to admire.

© 2013 Mark R. Smith, Esq. Mark R. Smith, Esq. is the founder and principal owner of the Law Offices of Mark R. Smith, P.C. in Las Vegas, NV. The Law Offices of Mark R. Smith, P.C., represents musicians and other entertainers in entertainment and intellectual property matter, as well as many other areas of the law. Visit www.LVEntertainmentLaw.com or www.MarkRSmithLaw.com or call us at (702) 518-ROCK (7625). Suggestions on topics you would like to see covered may be submitted to [email protected]com.

This article is intended for informational purposes only and no Attorney-Client relationship is intended to be created the author and reader.   The information contained in this article should not be relied upon without discussing the particular circumstances of your legal situation with an attorney.  

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