Copyright in Business: What Is Protected, How to Enforce, and Why It Is Wrong to Assume That What Is Found Online Is Free to Use

1. An image found on Google is not “free to use” – it is protected by copyright like any other work, and using it without a license may lead to a lawsuit.
2. Copyright infringement entitles the injured party to compensation of up to 100,000 shekels per infringement – without proving any damage whatsoever.
3. Moral rights – the right of the creator to be credited for their work – are protected by law separately from property rights, and remain with the creator even after they have sold the proprietary rights in the work.
4. A business that uses a work under a license that has expired infringes the rights from the moment of expiration, even if the use was legitimate beforehand.
5. An injunction may be sought to immediately halt the infringing use – sometimes even before a lawsuit has been filed.

What Protects You-and What Does Not

The Copyright Act, 5768-2007, protects original works: texts, images, video clips, music, software code, designs, and more. Protection does not require registration – it arises automatically upon creation of the work. There is no need to register, no need to add the © symbol, and no need to comply with any procedure. The creator is protected from the moment the work is created.

Two principal rights are protected by law. The economic right – the right to control the use of the work, to license others to use it for consideration, and to prevent use without a license. The moral right – the right of the creator to be credited as the creator, and that the work not be distorted or harm their honor. It is important to know: moral rights are not transferable-even if you have sold the proprietary rights in the work entirely, the moral rights remain with you.

The Compensation That May Be Claimed-and Why It Is Not a Uniform Amount

Section 56 of the Copyright Act provides that where copyright or moral rights have been infringed, the court may award the plaintiff compensation without proof of damage in an amount not exceeding 100,000 shekels – per infringement. There is no need to prove that you lost income, no need to present an economic opinion. It is sufficient to prove that the right was yours and that it was infringed.

However, the maximum amount is only an upper limit – not a guarantee of compensation. The court considers additional factors: the scope and distribution of the infringement, whether it involves a commercial business or a non-profit entity, whether the infringement was committed intentionally or in good faith, and what actual damage was caused – if any. An infringer who acted in good faith will be liable for lower compensation; an infringer who knew of the infringement and continued it may be liable for significantly higher compensation, and even above the statutory amount if actual damage is proven.

A point that affects the calculation of compensation: the court may determine that multiple infringements committed in a single course of conduct will be considered as one infringement for purposes of compensation. In other words, using one image across five different channels does not necessarily entitle one to five separate awards.

The Agreement-the Tool That Prevents the Dispute

Most copyright disputes arise from the same source: an agreement that was not signed, or that was drafted too vaguely. “I paid the photographer-so the photos are mine” – incorrect. “I received a license for the website-so I can also publish on social media” – not necessarily correct. Licensing agreements, work-for-hire agreements, and rights transfer transactions all require precise drafting that defines what was transferred, for what use, for which medium, for what period, and for which territory.

A business that commissions design work, photography, music, software code, or writing must ensure that the agreement expressly states that the rights are transferred to it. In the absence of an express agreement, it is quite possible that the creator you hired retains the copyright in the work created for you.

When to File a Lawsuit and When to Stop Beforehand

Not every infringement of rights justifies filing an immediate lawsuit. At times, a properly drafted demand letter results in cessation of the infringement and payment of compensation – quickly and relatively inexpensively. When the other party refuses, continues the infringement, or when dealing with extensive commercial infringement – pursuing legal proceedings is the way forward.

Another important tool to be aware of is the injunction. Section 53 of the Act provides that in a claim for copyright infringement, the plaintiff is entitled to relief by way of an injunction, unless the court finds reasons not to so order. This means: infringing use may be stopped immediately – before the damage continues and accumulates – while simultaneously pursuing the main proceeding for compensation.

What the Case Law Actually Says

To illustrate how seriously the courts treat this area, here are a few examples from case law:

In CA (District Court Tel Aviv) 17253-02-18 Schwartzenberg v. Walla! Communications Ltd., the case concerned an image published without a license by one of Israel’s largest digital portals. On appeal, the parties agreed to set the compensation at 100,000 ₪ – the maximum amount prescribed by law. The case illustrates that even large media entities are not exempt from liability, and that the law does not distinguish between large and small publishers.

An important principle established in case law: one who received an image from a source that appeared to be authorized – such as the spokesperson of a public authority – is not exempt from liability if they did not take the trouble to verify its source. Absolute “willful blindness” does not constitute a defense, although the degree of liability may be reduced compared to one who initiated the infringement.

Another principle established in case law: lectures by a lecturer are protected by copyright even when they were not published directly but were only transcribed in students’ notebooks – and one who publishes books based on those lectures without permission infringes the rights.

Another principle that, surprisingly, many are unaware of: in a musical work there are two separate layers of copyright. In a case represented by our firm (CA 2481-05 – Matti Caspi v. Hed Artzi Ltd. et al.), the court addressed the question of who owns the master tapes of a musical album. The court held that in every musical work there is a right in the work itself – belonging to the creator, and separately from it, a right in the recording – belonging to whoever financed and produced it. Even a famous artist does not automatically own the master tapes if they were not the one who financed the production. The claim was dismissed.

Copyright as a Business Asset

Many people think of copyright as a matter for artists only. In the modern business world, this is a mistake. Every company that develops software, every agency that produces marketing content, every brand that has unique designs – holds intellectual property assets that require professional management: documentation, proper agreements with creators and with clients, and a clear policy regarding the use of external content.

Proper management of copyright is not bureaucracy – it is protection of real business value, and prevention of exposure to lawsuits that often come from an unexpected direction.

Do you create content, use others’ content, or have you received a demand letter regarding copyright infringement? It is advisable to know what is available to you.

© Tidhar Tzur Law Firm | This article is for general information purposes only and does not constitute individual legal advice.