Defense of Copyright Claims: Don’t Let Your Proof Go Poof

Defense of Copyright Claims: Don’t Let Your Proof Go Poof

By Evynne Grover, AVP, Claims Practice Leader – Media Liability, QBE North America

No matter how diligent media companies and other creators and publishers of content are in taking steps to ensure that content was independently created or properly licensed, and thus unlikely to give rise to a copyright violation, there is always a risk of a claim. Defense of these claims requires evaluating evidence that proves there was no wrongdoing. Some evidence could be completely exculpatory, or at least powerful in persuading a claimant to retreat in the face of an uphill battle. However, if that documentation cannot be located and has effectively disappeared, a company could find itself entrenched in expensive and lengthy litigation or cornered into settling a claim. In addition, the company could lose the ability to keep the dispute, and its negative implications, from being thrust into the public eye.

The recent proliferation of communications platforms in which content literally disappears after a short period of time has only increased this risk. Consider this hypothetical scenario: the producers of a movie receive a claim from an individual who alleges he previously pitched a script to someone involved with the current production and alleges the current movie infringes his copyright. The producers believe they have a strong defense because they are confident the screenwriters independently created the concept and drafted the script. They ask the screenwriters for the earliest drafts to prove work began well before the date of the pitch. The screenwriters, however, do not have their original emails, notes, and drafts because they exchanged them via a popular communication app in which exchanged messages self-destruct after a prescribed period of time. For major productions, copyright infringement lawsuits can involve damages reaching well into the millions of dollars.

Mergers & acquisitions present another risk. For example, a company might be served with a copyright infringement lawsuit by a photographer alleging that the company published a photograph on its website without proper license from the photographer. What if the company cannot locate the license because it was acquired and merged into a bigger company, and the old electronic systems are no longer accessible? The company will be unable to easily prove its case. 

While grappling with these and other copyright risks, companies should work with specialized insurance brokers and carriers that understand the trends in media liability and offer tailored, up-to-date solutions to mitigate and transfer emerging risks. At QBE, we closely monitor how rapidly evolving technologies can change the risk landscape. The examples below highlight some of the document disappearing acts that can doom a swift and inexpensive resolution to a copyright claim. Here are the top five ways exculpatory documents can be lost, along with considerations for risk management:

  1. Limited Retention Modes of Communication
    Due to growing concerns of privacy, there has been an uptick in communication options with enhanced security protocols built in. For example, one popular messaging service app can send encrypted messages along with files, notes, and video. The messages can be set to be deleted from both end users’ devices within five seconds to one week of reading the message.  Another app gaining traction can send encrypted and content-expiring messages along with videos and file attachments. While self-destructing, or limited retention messages, can enhance privacy, they present a dilemma for the content creator accused of copyright infringement who no longer has the communications that prove their independent creation.  Content creators and their publishers should consider how users of self-destructing apps can track their work in a form that will protect them in the event of a copyright claim.

  2. Staff Turnover
    Although document management is an overall corporate function, it is the sum of many parts. Each employee has a function, and likely maintains files commensurate with that function.  When employees leave the company, it is critical to ensure the company continues to have access to the documents that they had maintained. Before they exit, consider asking the employees to explain their document management philosophy. Where did they store certain types of documents? Which drives? Which folders? Consider reviewing the drives and transferring any key documents to a more permanent drive before access to those drives is turned off.

  3. Change of Data Management Systems
    As companies seek to grow and become more efficient, they must often upgrade their data management systems. This might involve scanning paper documents to convert a paper system to paperless or paper-light system, or conversion from one email system or electronic database to another. When these changes occur, the focus is usually on future use and future storage, without much emphasis on accessing the old system. Often, the old system uses obsolete technology, making access technologically or financially impractical. Sometimes change includes mass copying of the data on the old system, but that is not always possible. Before changing systems, it would be prudent to evaluate the data that will not be copied. Consider how it might be accessed in the future.  Question what categories of documents are likely to be relevant in the future and consider whether they should be separately copied to the new system or made otherwise accessible in the future.

  4. Mergers and Acquisitions
    When a company merges with or acquires another company, it must plan for the future of the data management systems for all parties involved. Perhaps the separate systems will continue to be maintained. Alternatively, one company might adopt the systems of the other, or both companies might transfer all their data to a new system. As discussed above, these transitions often focus on the future and may not give enough consideration to accessing historical records. The acquiring company might bear liability for claims arising from the acquired company’s acts before the acquisition, and if the exculpatory evidence was not transferred to, or otherwise accessible by, the acquiring or merged company, it will not have optimal tools for defense of those claims.  Companies that merge with or acquire other companies should evaluate to what extent data that is not being copied to a new system needs to be maintained and remain accessible in the future.

  5. Insufficient Record Keeping
    Until the computer age, businesses maintained their records on paper kept in file cabinets, boxes, or piles. They were tangible and there were few options for managing them. Eventually, most businesses transitioned partly, or wholly, to electronic data systems, and file maintenance took on many other dimensions. There are myriad systems of managing corporate documents and data.  The key is to have a system and be consistent in its application so that you can find items, like license agreements, when you need them.

In conclusion, defending copyright claims is much easier when there is documentary evidence that the allegedly infringing use was properly licensed or originally created. As companies undergo change, however, a variety of factors can make locating those documents difficult if not impossible. Consequently, when companies make decisions regarding document management systems and document retention policies, they would be wise to consider the need to guard against copyright claims. This challenge is best faced by a collaborative effort among a company’s risk management, legal, information technology, human resources, transformation, and/or asset management departments. Since no system will ever be completely foolproof, the company should also work with an insurance broker and carrier that understand media content liability and have specialized products and services to minimize risk.

A slightly edited version of this article first appeared in Law360.

The subject matter and opinions expressed herein are the opinions of the individual author and may not reflect the opinions of QBE.  The contents herein are for informational purposes only and not for the purpose of providing legal, regulatory, or compliance advice.  The reader should contact his or her own attorney or compliance professional to obtain advice with respect to any particular issue or problem.