Category: Entertainment Law

Scene Magazine – October 2006

Here’s my October Scene Magazine column.  Yes, you’ve seen the title before if you’ve visited this site, and yes, the content is much the same, although I included a bit more about submittion of groups of works under a single registration and single registration fee.

If you’re concerned that you can’t afford the $45 per registration, then check out the page for group registrations for visual arts at the Copyright Office Web site HERE. You can also do group registrations for other types of creative works.
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$45 Creative Insurance Policy
© 2006 Kevin E. Houchin

I got a call the other day from a young woman who was pissed. She had been hired by a magazine to write an article for $1,000.00 – $500 up front and $500 on approval. She received the first check for $500 and sent the magazine editor a draft. Much to her dismay, the editor didn’t like her draft and canceled the contract. She, per the agreement, kept the $500 and the both went on their merry ways.

I’m sure you know where this is going – I did.

A couple of months after the rejection, her article turns up in the magazine with minimal (at least according to her) edits. She’d been ripped off! Righteous indignation flowed from her voice. I then asked the big question: “Did you register the article with the U.S. Copyright Office when you submitted the draft, or when they rejected your work?”

“No,” she replied.

I sighed, and then started sharing the bad news. In the U.S., copyright protection vests in the tangible expression of your creativity, at the moment the expression becomes tangible. You have legal rights without needing to register the work. However, without registration before the infringement, those rights are basically limited to “actual damages” which can be hard to prove in most cases. In the current example, actual damages are easy to prove because they would simply be the unpaid portion of the contract, $500.  The kicker in this situation is that each party has to pay their own attorney fees. So, while my pissed-off author had a legitimate case, there was no economic justification to spend more in legal fees trying to win the case than she had hope of ever recovering in court, not to mention the time it would take out of her schedule.

“So, what should I do next time?” she asked.

“Pay the $45 copyright registration fee on any work that has a reasonable possibility of getting used without your permission.” I responded.

One of the best business deals on the face of the planet is our federal copyright registration system. For a relatively minor fee of $45 you can move from probably having no economic justification for enforcing your rights, to possessing very powerful incentives to motivate compensation for the use of your work.

Here’s how it works. If you’ve created something original, by yourself or as part of a team, such as a song, article, book, painting, drawing, graphic design, sculpture, photograph, movie, dance, even a floor plan or an architectural elevation – practically anything “creative” – all it takes is $45 and the completion of a simple two-page form (available at www.copyright.gov) to protect your work.

Registration is easily worth the money because if you register before the infringement occurs two big things change. First, instead of having to prove actual damages, the judge can simply pick a number she thinks is fair somewhere between $750 and $150,000 per infringement. Second, attorney fees are on the table. Now there’s an economic justification for going after the infringer, even over just $500. If my author in the example had spent the $45 and registered her draft, I could have written the magazine on her behalf demanding the $500, plus a few hundred dollars extra to cover the willful infringement and my attorney fees.  Knowing that they would probably only lose MORE if this goes to court would have been a strong incentive for the magazine to pay up.

Whenever I tell this story to artists, musicians, and photographers the next question is always, “Does that mean I have to register EVERY work I create?! That would really add up and I don’t sell that much or at a high enough price to justify the $45.” Of course I can understand their positions. Registering a copyright is like buying an insurance policy; you have to find a balance that fits your risk tolerance. My rule is to register things that I feel are likely to have enough exposure that someone might want to use them – with or without my permission. If you’re a photographer, then register the works that are published in magazines or make it into juried shows. No matter what your media, you should register published works. Many times, you can register several published works as a set under one $45 registration fee.

If you have a bunch of unpublished work, you can register all of those as a set under a single registration fee. Depending on your level of output, you might do this monthly, quarterly, or whenever you get a bunch of work together. The effort in this situation is organizing the submission of a bunch of work all at once, because it’s time consuming to catalog 200 photos into one submission it’s harder to get over the inertia of organizing the single large filing for $45 than it is to pay more filing fees and do smaller sets as you go along through the year. It really comes down to how you want to spend your time versus how you want to spend your money.

The bottom line is to register as much of your work as you can afford and try to protect the rest through your contracts.  I’ll write more on those contracts in a later column.

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Kevin E. Houchin is a copyright, trademark, arts & entertainment, and business development attorney located in Fort Collins, Colorado working with creative people and businesses all across the United States. To contact Kevin Houchin, call 970-214-6808 or email him at kevin.houchin@houchinlaw.com.

Orphan Works Discussion Challenge

I’ve been researching the topic of the proposed change to the copyright law regarding orphan works. I’ve been debating the issue via email with a few artists and I’ve boiled my thoughts down to the following 3 points.

  1. Relative to truly orphaned works, the law makes things better.
  2. Relative to works that get mistakenly classified as orphaned works, which shouldn’t happen very often except in the case of unregistered works, the practical situation won’t get any worse.
  3. Relative to the creation and use of copyrighted works generally, the law might provide incentive for tools and registries that actually make things better for everyone.

I’m not “set” in these positions yet, and I’d really like to hear from YOU about your thoughts. Challenge me, call me a “bone-head”, or maybe even agree with me. I’d really love to fine tune my understanding of the issues and share that understanding as it develops.

Post your comments by clicking the comment link at in the header of this post.

Orphan Works

I started writing a post about the new copyright legislation on orphan works, but it ballooned up to about 3,500 words, much to long for a blog post.  Probably too long for most magazines to publish.  Anyway, I’m going to submit it for publication to a magazine or two.  If you want to see a copy of the draft, send me an email and I’ll share it with you. Maybe you can help me improve the piece.

Here’s a copy of the proposed statute.

Here’s a copy of the House report.

Artistic Debt

“… The history of art, literature and music suggests that creativity is an enigmatic process, not easily pigeonholed, and nay attempt to define it as simply a species of collage is counter-intuitive to everything that artists, psychologists, and kindergarten teachers know about the creative process. To make the remixing of others’ work the legal premise for re-defining copyright law would do a disservice to the majority of artists whose drawings and paintings do not depend on the actual appropriation of other people’s work. The debt most artists owe to the public domain is rather on of influence and inspiration; and that debt the artist repays by creating anew body of original work.”

(emphasis mine)

– Excerpted from The Illustrators’ Partnership reply comment address to the US Copyright Office discussing new legislation relative to Orphan Works.

I’ll be writing more on orphaned works over the next few days, but for more information, start here.

Scene Magazine – September 2006

I’ll be writing a monthly column on legal issues in Scene Magazine.  Here’s the first installment…

You’ve been writing some songs. You and a few friends can play. You get a gig. It’s going to pay a few hundred bucks and maybe some beers. Hey, you’re getting paid to play and party. What could go wrong?

Plenty. You’ve just formed a business – a “general partnership” to be exact. “Big deal” you say, “no worries, we’ll just split the cash and maybe report some of it on our taxes.” Of course you will. As a lawyer, that’s not my worry. My worry is what happens with your buddy Tommy drives home from the gig (maybe with a couple too many beers in him) and gets in a car accident that hurts someone.

Yup, Tommy is in big trouble. The thing is, so are you. As a “general partner” in your band, you’re liable for all the activity of the partners (or agents, or employees) while engaged in the business of the partnership. In this case, driving home from the gig would be considered being engaged in the business of the partnership.

Tommy’s accident just put your house, car, amp, guitar, drums, IRA, and everything else you own on the line. You could lose everything for the split of the $500 that came in at the door for that one gig.

So, what do you do about it? First, don’t let your band mates drive after drinking – always have a designated driver. Avoid the risk. Second, form an LLC. It only costs $25 to form an LLC in Colorado. Just go to www.sos.state.co.us, log into the business center and fill out the online form. Easy. (If you have any questions, email or call me!)

The LLC will limit liability (that’s why it’s called a “Limited Liability Company” in the first place) to the assets that are actually IN the company. If it’s YOU that has the car accident, or gets in a fight, or does something else that’s generally considered stupid and exposes you and the group to a lawsuit, your house is still on the line. But, if it’s Tommy that screws up, HE might lose everything, but you only lose the assets you’ve put into the company.

Of course, now you have a “legitimate” business. That business has to keep financial records and file an “informational” tax return. So, after you finish filling out the paperwork on the Secreatary of State Web site, you need to apply for an Employee Identification Number (EIN) – basically a social security number for your new company. You get this by filling out IRS form SS-4, which you can get right from the home page of www.irs.gov. Check the box as a partnership and have your company end its fiscal year in December. You can even complete this task over the phone.

Take your organization number (from the Secretary of State) and your EIN (from the IRS) to the bank and start a checking account. Start running all the income and expenses through that checking account. At the end of the year, you file a tax return for the business that informs the IRS how much each “member” (owner) of the band needs to report on their individual tax return. The IRS computers watch for these numbers to match up – if they don’t you’ll be at much higher risk of an audit.

You’ll want to discuss who can write checks with the rest of the band. It’s a good idea to say that any check for more than $500 or so requires two signatures. If the band is generating some real income, or, if one or more members tends to do more work, then you should really talk with an attorney and create an “Operating Agreement” that lets everyone know and documents the way money gets slit. If you are writing new material, then you need to figure out the copyright ownership issues (subject of a later column) sort out. The operating agreement should also lay out how someone leaves or joins the band, what is expected of the owners, and your general intentions relative to working together or solo.

Music is a business, granted, it can be more fun than accounting, but it’s still a business and needs to be treated as such. It doesn’t take a lot of time or money to shield yourself from the real potential liabilities that come with any business. Do yourself a favor and invest a little effort to make sure your band remains a fun, rewarding activity and not something you’ll regret while watching all of your assets disappear because your buddy screwed up.

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Kevin E. Houchin is a copyright, trademark, arts & entertainment, and business development attorney located in Fort Collins, Colorado working with creative people and businesses all across the United States. To contact Kevin Houchin, call 970-214-6808 or email him at kevin.houchin@houchinlaw.com.