Copyright Registration Can Turnaround a Business Close to Bankruptcy

Copyright registration is a way to protect intellectual property. When a business is not doing well and close to bankruptcy, protecting intellectual property can turnaround the company.

In Apple Inc. v. Psystar Corp., (U. S. Court of appeals, 9th Circuit, Case No. 10-15113, Apple originally brought an action against Psystar, a small computer manufacturer, for copyright infringement because Psystar was using Apple’s software on Psystar computers. The appeals court decided 09/28/2011 to affirm the district court’s decision for Apple.

The district court held Psystar infringed Apple’s United States registered copyrights in its Mac OS X operating software. Though Psystar did not appeal the lower court’s ruling of copyright infringement, Psystar did appeal the district court’s rejection of its copyright misuse defense and the lower court’s order that Psystar stops its continuing infringement of Apple’s intellectual property. Psystar lost on appeal.

This appellate court decision reminds us of the advantages of federal copyright registration, and how protecting copyrights can allow a company in the brink of bankruptcy to sue another for damages and obtain funding for future business projects, or require another company to pay fees to use its copyrights to generate revenues.

Listed here are some benefits of registering copyrights for the business in financial stress:

1. Creates public record of a copyright infringement action.

2. Before filing an infringement claim in United States District Courts, registration is required for United States authorship works.

3. If prior to or within 5 years of publication, registration establishes prima facie evidence of the validity of the copyright.

4. If registration is made before an infringement of a work, statutory damages (meaning damages provided by legislation without the need to prove in a lawsuit) and attorney’s fees will be available to the copyright holder. Otherwise, without statutory damages, just an award of actual damages and profits is available.

5. Registration allows the copyright holder to record the registration with the United States Customs Service to prevent the importation of infringing copies.

Contact an experienced New York bankruptcy attorney to learn more about how to deal with financial distress.

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