Respect for Copyright as a Component of ESG
ESG (Environmental, Social, and Governance) has become an important buzz-word among publicly traded companies recently, especially as some investment funds seek to do well by investing in companies with strong values and ethical corporate governance. According to The Harvard Business Review, as of December 2021, assets under management by investment funds with ESG objectives amounted to more than $2.7 trillion. A publicly traded corporation has a responsibility to its investors to maximize shareholder value. Building a compelling ESG strategy is aligned with that responsibility, as it opens up investment from ESG funds, which in turn provides a boost for the stock price. This is good news both for society and for the economy as a whole, as it prompts corporations to act in increasingly responsible ways.
However, as part of a strong ESG framework, companies and investors should also incorporate a respect for copyrights— the engine which fuels society’s need for new works—everything from journal and news articles, software and other information products, to music, television shows, and other forms of entertainment. This means going to copyright owners and rightsholders to secure permissions and authorizations to display, distribute, or otherwise use copyrighted materials and works, discouraging copyright infringement and piracy, increasing awareness and education of such activities, and installing corresponding best practices and risk management frameworks.
How Corporations Can Include Copyrights in Their ESG Framework
Respect for copyright can start at copyright compliance— meaning that companies must obtain permissions to use copyrighted material from creators. Ignoring copyright compliance increases the risk profile of a company because it can lead to costly disputes and lawsuits and damage a company’s reputation as a reliable and responsible business. More importantly though, copyright infringement is socially harmful, because it steals from creators and rights holders, reducing their financial incentive to create more, often high-quality, works. A less creative society is a poorer society.
However, a respect for copyright doesn’t begin and end with just licensing — it also requires corporations to become educated on piracy and to educate employees about the harms of pirating and infringing copyrighted works, while discouraging such illicit activities. Audiovisual, visual, and musical works are especially vulnerable to piracy, as these works are so commonly available online in digital form. Piracy of these works harms photographers, fine artists, musicians, actors and everyone behind the scenes who does the hard work to make genius come to life. With every illegal download or stream of a movie or a TV show, not only does a digital thief or pirate, profit from the infringing activity, but these infringing activities also deny monies that would have contributed to the paychecks, healthcare plans, and retirement plans of multitudes of artists, actors, production crew members, directors, writers, and many other behind-the-scenes creatives.
Public Performance Piracy Is Even Less Well Understood
Additionally, while there is general knowledge in society about digital piracy, there is less understanding about public performance piracy. Under US copyright law, when audiovisual or musical works are exhibited or played in public (typically in an office environment or in a commercial setting like a restaurant), a separate license is required from the one required to exhibit the same works in a private, non-commercial setting. This concept is reasonably well understood for music, but it is poorly understood for film and television.
A Path for Responsible Corporations
To ensure full copyright compliance, responsible corporations should proactively obtain licenses and permissions from the owners of copyrighted material before using it. They should also implement measures and best practices to prevent their employees from using copyrighted materials without authorization. A company that does not incorporate a respect for copyright in their ESG framework risks not only costly copyright liabilities which could have been avoided with the proper training, education, and awareness of the importance of copyright for their employees, but also undermines and degrades the foundational rights which encourage innovation and creativity and make society financially and culturally wealthier.
Corporations can demonstrate their commitment to ethical and socially responsible behavior by adhering to the legal requirements of copyright laws and by ensuring best practices that foster and encourage respect for copyright owners and creators. This will protect and encourage their ability under copyright law to continue creating new creative works. Copyright laws were enacted to promote the creation of socially valuable works. Copyright compliance should be viewed as an essential component of any corporate ESG initiatives. Responsible corporations that take ESG seriously should make copyright compliance a priority.
Dave Davis is Chief Commercial Officer at MPLC (Motion Picture Licensing Corporation), which works on behalf of more than 1,000 TV and film studios to ensure public performance copyright compliance. Dave has almost two decades of experience licensing film and television content in a senior executive capacity, including stints at 20th Century Fox, Paramount Pictures and NBCUniversal. Dave started his entertainment industry career at The Motion Picture Association. Dave holds a B.A. from Wesleyan University and a J.D. from the University of Michigan Law School (although he is quick to caution that he does not currently practice law).
Rachel Kim is Copyright Counsel at the Copyright Alliance where she has advocated for and worked on a variety of copyright policy issues including Copyright Claims Board regulations, ancillary rights for press publishers, and on Artificial Intelligence. Prior to rejoining the Copyright Alliance, she held various positions at CBS Studios and NBCUniversal, advising and working with various television production crew and creatives on legal and business risks. She also completed a legal fellowship and internship at the Copyright Alliance and interned at the National Music Publishers’ Association. Rachel earned her J.D. from the Antonin Scalia Law School at George Mason University, and her B.A. in Chinese Language/Literature from George Mason University.