Electronic Signatures and Copyright Transfers

Copyright law makes it very easy to license your work. In fact, under some circumstances, you can license your work without saying a single word. In those cases, your actions alone grant a (limited) license to others.

However, copyright transfers have always been a more difficult story. If you want to actually transfer ownership of your work, the law states clearly that it has to be done in writing and signed by the owner.

But like a lot of things, the definition of “in writing” has changed a lot with the Internet and the issue of what does or does not constitute a copyright transfer gets a little thornier.

One law that attempted to bring clarity to this issue (and the much broader issue of contracts online) was the Electronic Signatures in Global and National Commerce Act (ESIGN Act). That act stated that an electronic signature was, for the purpose of a contract, was just as binding as a physical one.

However, plaintiffs haven’t been exactly beating down the courtroom doors with cases related to electronic signatures and copyright transfers. Related cases have been few and far between.

But in a ruling last week, the Fourth Circuit Court of Appeals has upheld that the ESIGN act does apply to copyright transfers, giving much greater certainty to the electronic transfer of copyrights and streamlining the process.

However, with that ease comes a risk and a reminder that you need to be careful what you put in writing when it comes to your copyright.

Why Electronic Signatures Matter

We’ve talked about the ESIGN act a few times before on this site, usually in relation to “signing” an electronically-sent Digital Millennium Copyright Act (DMCA) notice.

However, the ESIGN act applies to all areas where two parties need to sign a contract and it sets a remarkably low bar for what constitutes an electronic signature. The law says defines an electronic signature as:

An electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.

In short, an electronic signature can be almost anything and it’s why ticking the “I agree” box binds you to the terms of service the same as if you had printed it out and signed your name to it.

To be clear, electronic signatures are a good thing. They’ve played a key role and moving the Web forward, making electronic commerce possible and streamlining pretty much everything we do online.

However, it does mean that you have to be careful with what you say online lest you sign an agreement you grow to regret.

A Regretful Email

Consider the case of Rafael Vergara Hermosilla, a songwriter who sued Coca-Cola for copyright infringement alleging that the soda giant used his Spanish adaptation of a song in advertisements without his permission.

Initially Vergara had some success in the case, but that turned around quickly when the judge ruled that he had actually assigned his copyright to Universal Music Group, who in turn licensed it to Coca-Cola.

Long story short, Coca-Cola contracted Universal Music Latin America to produce the Spanish version of the song “Waving Flag” and Universal, in turn contracted the job to Vergara. However, after a dispute rose up with the song being sold on iTunes, Vergara had an email exchange with Universal where he was seeking acknowledgement of his contribution.

In that exchange, he said “consider [the song] a Work for Hire with no economic compensation”. Universal accepted the offer and gave him the credit he wanted. Under Florida law, since one person had proposed a contract and the other had accepted it unconditionally, it was a legally-binding contract.

Though Vegara tried to back out of that deal, he couldn’t and his email constituted a copyright transfer. This decision was upheld by the Eleventh Circuit Court of Appeals.

What this Means

What this means is pretty simple: When negotiating for your copyrights, be very careful what you put into writing.

Though there haven’t been many cases involving electronic signatures and copyright transfers, the courts have consistently come down on the site of a broad interpretation of what is a contract and what constitutes as “in writing”.

If you’re looking to either obtain or sign away your copyrights, you may be wise to do most of your negotiations orally and only putting things in writing when you are closer to a deal.

You can also use services such as Kunvey (previous coverage) to help facilitate transfers as a middle man, helping to provide clarity and certainty.

However, given that, in many cases, you can transfer a copyright simply by sending an email, it’s important to be careful when negotiating and, most importantly, only say and agree to what you’re absolutely certain of.

You might find yourself saying something that you can’t take back.

Bottom Line

Though transferring copyrights has always been more difficult than giving out non-exclusive licenses to a work, technology and legal changes have made it far easier. While that can be a good thing when it makes life easier for those who are happy with the deal, it can lead to some regrets.

It’s important, when negotiating your copyright, to treat it as you would any other contract. Do not assume, as some do, that since it’s over a copyright that it’s different than negotiating for a car or a job. Intellectual property can be traded in the exact same way as physical property, the law has made that clear.

So while the law says such transfers have to be in writing, it is still possible to sign away your copyright without completely meaning to. So be smart, be careful what you put in writing and always negotiate in good faith.

If you do that, most likely, you wont’ wind up being another case to test these rules.