What Every Small Business Should Know about Piracy and Counterfeiting
In the first quarter of 2022 alone, over 1.2 million business applications were filed. Surprisingly, 99% of businesses are small businesses. The exact definition of a small business can vary from state to state, but it generally has three criteria. First, how much revenue is being generated. The qualifying amount ranges between $1-$40 million per year. The next qualification is the number of employees that work for the business. Less than 500 employees is considered the standard. The final indicator is the business organization which the company files for. Sole proprietorships or partnerships are generally what small businesses are categorized under with very many fitting into the LLC and S-Corp category. They range from traditional family owned brick-and-mortar stores to ETSY style businesses that run completely online. Professional practices, such as law firms and chiropractic offices, are also considered small businesses.
Unfortunately, while businesses have been increasing, their threats have been as well.
Two of the biggest threats to small businesses are pirating and counterfeit goods.
PIRACY vs. COUNTERFEIT
Piracy is known as the act of illegally reproducing and distributing copyrighted materials. Watching bootlegged movies or illegally downloading music is a very common practice, which incurs great profit loss within multiple industries. There is an estimated combined $170 billion loss of revenue and 360 billion loss of streams in the media due to pirated content.
A counterfeit item is defined as physical fake goods that infringe on trademarks or patents. These are often imitations of expensive brand name items that are sold for a much lower price or black market versions of pricey prescription medications or supplements. When these goods are in circulation, they can “dilute” the original brand. Brand dilution related to counterfeit items occurs when consumers have an altered, normally negative, perception of the original brand or goods due to confusion between the original and the dupe.
The counterfeit market has grown to become a $500 billion industry that contributes to a yearly loss of revenue between $1.7-$4.5 trillion. Counterfeit goods are often much lower quality than their authentic counterparts with sometimes deadly effects from defective products or dangerous chemical interactions with unknown ingredients.
To prevent piracy and/or counterfeiting as discussed above, it is important to make use of legal tools such as filing copyrights and trademarks. If a business produces creative media such as photographers, videographers, film makers, course creators, or online coaching a stolen version of the work that is subsequently pirated will likely fall under a violation of copyright law. Whereas, if a business produces a physical good such as clothing, cosmetics, jewlery, or purses are experiencing fake versions of the product being sold on the internet as an authentic item this likely would fall under a violation of trademark law.
When every single dollar counts, trademarks and copyrights can operate as key legal tools for small business owners to ensure they are protecting themselves from thieves and copycats in the market looking to prey on unprepared brands and businesses
Copyright
Copyright is a form of protection provided by the laws of the United States to the authors of “original works of authorship” that are fixed in a tangible form of expression. An original work of authorship is a work that is independently created by a human author and possesses at least some minimal degree of creativity. Examples of original works include musical works, choreography, art, movies, books, and more. Although copyright exists automatically at the time of creation, registration with the US Copyright Office is necessary to enforce the exclusive rights of the creator.
Trademark
A trademark can be any word, phrase, symbol, design, or a combination of these that identify a goods or services. Examples include but are not limited to product names, logos, slogans, and trade dress, which is the physical look of the product. Common Law rights to a trademark are established by consistently utilizing a mark in connection with a business or product but do not provide owners the nationwide right to exclusively utilize a trademark in connection with a good or service. The right to be the only user of a particular trademark can only be obtained through federal registration of a trademark with the United States Patent and Trademark Office.
What does this mean for small business owners?
When it comes to enforcing IP rights and protecting the cornerstones of what makes a small business profitable, owners must stay vigilant. It is important to constantly search for infringement, as if it is not reported then the losses will continue to occur and in some cases may be considered a waiver of rights. Additional ways to protect a business or brand against piracy and counterfeiting include: platform take down requests, cease & desist letters, or legal action via courts or small claims boards.
Take Down + Cease & Desist
If an infringement is found, business owners can often report the infringing content to be removed and taken down from the platform. Additionally, a cease and desist letter to the infringing party notifying them of their infringement and misconduct and to stop the infringement immediately are often utilized by brands to show the seriousness of the matter and to enforce applicable rights.
Courts + Copyright Small Claims Board
Once a copyright is registered, owners have the ability to engage courts to enforce their applicable rights to stop counterfeiting and infringement. An additional resource is the newly operational Copyright Small Claims Board. This board provides a simple, virtual, and cost-efficient way to settle copyright disputes up to $30,000 additionally utilization of the board is available to all copyright owners even without prior registration.
If small businesses make up 99% of all businesses the billion dollar counterfeit and pirating industry undoubtedly impacts small businesses the most. When every single dollar counts, trademarks and copyrights can operate as key legal tools for small business owners to ensure they are protecting themselves from thieves and copycats in the market looking to prey on unprepared brands and businesses.
About the Authors:
Liberty Bing is a Spring 2022 intellectual property intern for the Law Firm of Lawson McKinley. Liberty is a Pre-Law Business Management major at the University of Georgia. Liberty sits on the Terry Student Diversity Advocacy Counsel and has previous internship experience in marketing and strategic management.
Whitnie Riden Esq is an Associate at the Law Firm of Lawson McKinley in its Sports and Intellectual Property practice areas. She is a graduate of Georgia State University and Atlanta’s John Marshall College of Law.
Legal Notice:
The information contained in this post is for informational and education purposes only and should not be considered in any manner as legal advice and should not be relied upon for timeliness or accuracy. This article is not intended to create (nor does it) an attorney-client relationship between readers and the author organization. Readers should not act upon any information found within this post without first seeking professional legal counsel. Any views expressed by readers in comments to blog posts or in guest posts are not necessarily the views of the Law Firm of Lawson McKinley or the authors. Readers leaving comments grant Law Firm of Lawson McKinley the right to edit or modify such comments and and to edit or delete such comments for any reason.
- Published in Blog
Rap on Trial -California and New York Criminal Proceedings under Fire for Racial Bias, Unfair Use of Creative Expression
The right to a fair trial is an unequivocal right within a democracy, one that is guaranteed in the United States constitution. Yet, across the country, people are being prosecuted based largely on the contents of their music as evidence of crimes. Artistic expression in the form of lyrics is being weaponized even when its relevance to a crime is inferential as opposed to explicit. Fortunately, new legislation in states like California and New York aim to address this issue.
Dr. Andrea Dennis has identified at least 500 cases of rap being used in criminal cases in the United States as of 2020. What’s more? This phenomenon applies only to rap – no other genre of music makes it into the courtroom. To put this into perspective, it would be as though Johnny Cash’s “Folsom Prison Blues” and “Delia’s Gone” were used against him as evidence that he is capable of committing a murder or has admited to one previously. Or if Edgar Allen Poe was sentenced for a murder based on his renowned poem, “the Tell-Tale Heart.” Similiarly, the use of rap as evidence should not be recognized in the courtroom either.
The law prohibits using evidence in court that points to an individual’s character and their supposed inclination to act a certain way. However, rap lyrics and music videos are often used to circumvent this rule. Relying on prejudicial bias, prosecutors twist rappers’ artistic words into confessions or evidence of guilt and involvement in crime. Rap on trial purposefully feeds into a jury’s existing biases.
Researchers have found that rap music is viewed as more threatening, more offensive, and less artistic than other genres with similarly violent themes. Even when presented with the same set of lyrics, people reacted considerably more negatively when told that the lyrics originated from a rap song as opposed to country or folk. Furthermore, the writers of violent “rap” lyrics are viewed as more likely to be violent and involved in criminal activity than writers of country or heavy metal songs.
The phenomenon of using rap lyrics in court dates back to early the early 90s. The practice became so commonplace that the American Prosecutor’s Research Institute, in a 2004 manual on gang cases, recommends prosecutors use lyrics to “invade and exploit the defendant’s true personality.”
Rap on trial has now become routine, affecting young, entrepreneurial rappers and big name rappers alike. Drakeo the Ruler was charged for murder with no evidence except his rap songs and music videos. In fact, prosecutors had a recording of a 17-year-old confessing to the killing and another man admitting to firing additional shots. He was later acquitted for the murder charge because the case against him was built solely on his songs. Drakeo was additionally prosecuted for being a “gang leader,” the gang referring to his rap crew.
There are many similar cases involving amateur rappers: in 2016, the courts upheld William Michael Jordan’s murder conviction after prosecutors played a rap video to jurors, even though there was no physical evidence against him; in 2020, the Maryland Appeals Court allowed Lawrence Montague’s rap lyrics to be entered into evidence, resulting in his murder conviction being upheld, despite scant evidence otherwise; and in 2021, Deonte O. Tomlinson’s murder conviction was upheld in Conneticut after the court allowed rap lyrics into court that were deemed “irrelevant” to the case. The list of examples goes on and on and on.
A recent policy from California, titled the California Racial Justice Act (CRJA) of 2020, seeks to eliminate this type of racial bias in courts. A defendant may invoke this policy if they feel that racial bias or prejudice played any role in their conviction. The CRJA would assist individuals who feel that they have been prosecuted with little evidence except for music and lyrics that biased the jury’s opinion. This would give many individuals an opportunity to be tried again but this time, fairly and equally.
Rap music is an art form with long standing traditions that are well-documented throughout its history. Allowing it be used as evidence is ultimately a violation of the first amendment, specifically the right to free speech. Moreover, the use of certain creative expression in courts (and not others) legitimizes using evidence steeped deep in stereotypes.
The practice of rap on trial is just the tip of the iceberg. If rap lyrics, music videos, and the surrounding culture continue to be used in court, this sets a precedent for other forms of speech and expression to be allowed into evidence as well. Who’s to say where the line will be drawn? This fundamental violation of the right to free speech and the right to a fair trial must be addressed beyond state borders and the CRJA could readily serve as a template for federal policymakers.
-Buket Urgen, Legislative Advocacy Intern
Buket Urgen is a senior at the University of Georgia in the Music Business Certificate program, majoring in International Affairs. Urgen most recently served as chief of staff for Georgia congressman Spencer Frye assisting with policy and research. Buket is a Spring 2022 legislative advocacy intern at the Law Firm of Lawson McKinley exploring projects connected to local state and federal music related legislation.
- Published in Blog
