An Overview of Copyright - for Social Enterprises & Non-Profit Organisations

“Intellectual property” is an oft-used phrase in the for-profit world.  These days, it’s also quite a familiar term in the social enterprise and even non-profit , arena.

There are a lot of opinions relating to intellectual property, which may or may not, be grounded in reality.  The purpose of this article therefore, is to provide a quick, easy-to-understand snapshot and some links to publicly-available resources, that might help a non-profit organisation or social enterprise understand some of the basics.

Part 1 : COPYRIGHT

So, what exactly is protected by copyright?

Basically, copyright subsists in literary, artistic and musical works. Creative original works such as artwork, drawings, books, musical arrangements and compositions, photographs, films, plays, movies, sound recordings, websites, blogs and (even though this one sounds like the odd one out )…source code. That is to say, the underlying source code in your computer programme is protected by copyright.

How does copyright come into existence or rather, how is it created?

The eligibility criteria for copyright creation is listed here on the Malaysian Intellectual Property Organisation (MyIPO) website here. Essentially, a work must be original, of sufficient skill and effort, reduced to physical form, and created in Malaysia (or in another country which is a Berne Convention member state) by a citizen or permanent resident. There’s a long story behind the Berne Convention which is likely to be of more interest to copyright  lawyers than anyone else, but if you’d really like to know more about it, go here.

How is copyright registered/protected?

Contrary to popular belief, copyright does not have to be registered in order to be protected (there are some exceptions to this general rule, as some countries do require it).  However, as far as Malaysia is concerned, copyright automatically subsists/comes into being upon creation, on condition that the eligibility criteria is satisfied. That said, many countries offer avenues to voluntarily “register” copyright, including Malaysia.

In Malaysia, MyIPO has a copyright registry allowing for voluntary notification.  (See voluntary notification.). There’s a process to follow, forms to fill, etc. While voluntary notification is a good idea, there are other options. You can also just use the symbol  © followed by the name of the owner and the year of publication, on the work itself. Example : ©  XYZ Sdn Bhd 2016. Or, you as the copyright owner could affirm a statutory declaration or affidavit, affixing the copyrighted work (or rather a printout thereof) as an exhibit. But if you’re going to do this, you might as well just go through the whole process for voluntary notification. For a sample statutory declaration, go to sample statutory declaration.

Now, unless you’re a die-hard DIY type , you would be best advised to get the assistance of a legal firm or IP consulting firm, to help you navigate through the paperwork. It may cost you money, but you’ll save time and bureaucratic delays by getting qualified advice. Probably money too, in the long run.

To minimize costs on legal and consulting fees, check whether there are any lawyers or IP consultants amongst your volunteers. Perhaps, you could request their services for free as a CSR programme for their firm/company, or perhaps they might be willing to provide free/pro-bono services in return for publicity as a supporting organisation ie. you could offer to put their logo on your promotional material, social media platforms, etc.

How long does copyright last?

This info is right here at http://www.myipo.gov.my/soalan-lazim-hakcipta. For literary, musical and artistic works, copyright subsists during the life of the author plus 50 years after the author’s death; for sound recordings, films and broadcasts, copyright subsists for 50 years from the year following the publication of the work; and for published editions, copyright subsists for 50 years from the year following the year the edition was first published.

Who is the copyright owner?

OK, this could get a little complicated. In some situations, the copyright owner is not the actual author/creator of the work.  This could happen where a work is created in the course of employment, or in the case of a commissioned work. For example, if you are an employee employed by a company, the copyright in anything you create in the course of your employment vests in your employer (unless you have contracted otherwise in an agreement). The same thing happens if you have created the work as an independent consultant, and you have been paid to create the work.

In such situations, you do not own the copyright in the work (unless you have contracted otherwise in an agreement). By operation of law, the company that hired you owns the copyright in the work that was created. By the same token, if you are the employer (ie. the owner of the company that employs staff), then the copyright subsisting in the works created by your staff and your independent consultants, belongs to your company (unless you entered into an agreement with your staff or independent consultants that says otherwise).

What can the owner do with copyright?

Copyright ownership gives the copyright owner with a variety of exclusive rights. This is the exclusive right (meaning, only you have the right) to control how others “deal” with the product in which your copyright subsists. Dealing covers a variety of uses, such as reproducing/copying, performing, communicating, renting, distributing, selling, performing and others. Basically, it means that without your license or permission, a third party cannot use (or “deal with”) the product.

This is subject to a few non-commercial use exceptions such as fair use, parody or pastiche, personal/private study, non-profit research , etc – you can view the exceptions, under Section 13(2) of the Copyright Act, 1987. What this means is, if a third party uses a product in which you own the copyright, for the excluded purposes , then no cause of action to sue that party for copyright infringement, exists.

How is copyright commercialised?

Meaning to say, how do people make money from it?  Ok so copyright is usually commercialized in the form of licensing. Let’s take software as an example. The source code subsisting in the software is copyrightable.  So in order to commercialise the copyright subsisting in the source code which forms part of the software, the owner could license the software to a customer in consideration for royalties, annual maintenance fees and other fees. The customer will sign a Software License Agreement (such agreements have many names) or, if the software is downloaded online, click “I Accept” on a EULA (End User License Agreement). The revenue stream here in terms of commercialisation, is in the form of the fees (royalties, annual maintenance fees etc) that the licensor charges the licensee. 

Regardless of what the agreement is called or what it looks like, ie. whether it’s a 50-page agreement or a 1-page  online EULA, it is still a copyright license under which the owner gets to control how the customer/licensee uses the software (or rather, how the customer/licensee “deals” with the copyright subsisting in the software). For example, the license agreement may restrict the number of copies the customer can install on his servers, it might restrict the number of users who can access it, or other forms of control.  If the licensee (purchaser) uses the software in a manner expressly or impliedly restricted under the agreement, he is in breach of it and the licensor (you/your social enterprise/your non profit organisation) could explore a number of legal remedies.

What are Collective Management Organisations (“CMO’s) and why does my organisation have to pay them money when I play music for an event?

A write up on CMO's is available here. 

In a nutshell, if for example you purchase a CD, it comes with a license (you won’t see any document that says so in the CD jacket, but that is the arrangement from a copyright perspective). That license is for private & domestic use only, which means, the license does not cover usage in a commercial setting or business premise. If you want to play your CD at an event in a commercial setting, it is deemed a broadcast, and you’ll need a license and will need to pay a certain amount in royalties to the CMO that collects royalties on behalf of the owners of the different layers of copyright in the music on your CD.

A list of CMO’s below:

In Malaysia, the music rights owners have formed the following Collecting Societies:

Name:   Public Performance Malaysia Sdn Bhd ["PPM"] (173608-V)
Year of Incorporation:  1988
Members: Recording Companies
Works Represented: Sound, Music Video and Karaoke Recordings
Website: www.ppm.org.my

Name: Music Authors Copyright Protection Bhd  ["MACP"] (186403-X)
Year of Incorporation:  1989  
Members: Composers, Lyricists and Publishers
Works Represented: Musical Works
Website: www.macp.com.my

Name: Performers and Artistes Rights (M) Sdn Bhd["PRISM"](542747M)
Year of Incorporation: 2001
Members: Recording Artistes and Musicians
Works Represented: Performances embodied in Sound Recordings
Website: www.prism.org.my

How is copyright enforced in Malaysia?

The  Copyright Act 1987 lists out  remedies and enforcement options here.

Technically, if someone infringes your copyright – that is, uses it without your permission or license, you can pursue legal action against them.

This sounds great on paper, but we need to unpack the concept further, and the key question to be addressed here is (as always, for the non-profit organisation or social enterprise), costs.

Civil action

A civil court action could be brought by you in your personal capacity, against the infringer. This starts off with a letter known as a “C&D” or “Cease and Desist” letter, informing the infringer that he should cease the infringement within [x] number of days failing which, you will pursue legal action in court.

Assuming the infringer ignores your letter and continues with the infringing acts, you could hire a lawyer and go after the infringer for damages, an account of profits, and injunctive relief (injunctions are orders that a court could grant to stop the infringer from carrying out certain acts) . Again, this sounds good on paper but what it actually means is, you will end up paying a large legal fee for your lawyers to prepare the necessary documentation and represent you in court, and you will find yourself going through a time consuming and tedious court process, unless you can “broker” a settlement out of court and get the infringer to pay you something to “settle” the case.  All in all, the options to enforce your rights as a copyright owner are definitely available. In an ideal situation where there’s an unlimited litigation budget, then by all means, go for it. 

Criminal action

Some acts of infringement do have criminal ramifications. One good example would be pirated DVDs. It is an offence to make for sale or hire, import, sell, distribute, etc, pirated DVDs. The owners of copyrights subsisting in popular movies, such as the Motion Picture Association of America, representing 6 major studios, are able to exert pressure on governments including Malaysia, usually by invoking the provisions of multilateral trade agreements to which Malaysia is a party, to “step up” enforcement measures to conduct raids in order to round up and charge all those involved in pirating, distributing and selling DVDs. However, given the prevalence of various file sharing torrent sites and apps, such measures are not likely to be that effective in the long run, as many individuals are able to access infringing material directly. Private and domestic use by an individual of material that infringes copyright, does not fall within the ambit of the Ministry’s enforcement powers.

 Large and powerful alliances such as Business Software Alliance which represents Microsoft, Adobe , and several other software giants, can request the Ministry of Domestic Trade to raid business premises where unlicensed software is being used, seize all the computers and charge the directors of the companies concerned, in the criminal courts (see Section 44 of the Copyright Act 1987). For an idea of what happens when the Ministry enforcement officers conduct a raid, read this article.. In fact, the Ministry actually offers rewards to people who are willing to call up and “expose” companies that use unlicensed/pirated software. See this article..So please be reminded to ensure that there is no pirated software on the laptops and PCs used on the premises of your non-profit organisation, or social enterprise, just in case your office is raided. 

The next installment in this series will cover patents. Stay tuned!:-)