Entrepreneurs looking to capitalize on photographs or other images they find on the web, beware. A couple of wrong clicks could really cost you.

Take, for example, Shepard Fairey, the Los Angeles-based street artist famous for creating the iconic, red, white and blue poster of President Barack Obama with the word “HOPE” spelled underneath. The photo on which the poster is based belongs to the Associated Press, and Fairey used it, and added his own touches, without asking the 100-year-old news organization for permission.

That omission could mean a hit the pocketbook for Fairey, who is currently selling signed versions of his work on his Obey Giant website for $30. (A mural-sized reproduction of the disputed image is being sold in London for $146,195.50.)

Now AP wants credit and compensation for use of the photo. But Fairey, though he acknowledges that the image is based on a 2006 photo of Obama taken by Mannie Garcia for the AP, says he does not believe that the company has any right to his work. The two are currently negotiating a resolution to the dispute.

“This case is really about fair use,” says June Besek, executive director of the Kernochan Center for Law, Media and the Arts at Columbia Law School. “It shows that entrepreneurs should tread very carefully when using someone else’s work.”

Copyright Law: What You Need to Know
A copyright protects the owner or creator from having a work used without permission. Whenever you write, photograph or sing something completely original, that work becomes your property to use as you see fit.

Using someone else’s work without permission may constitute a violation of copyright law. If you’re unsure whether or not you can use an image or work that you’ve found online, here are some guidelines that may help you determine if you’ve broken the law.

1. Purpose of use. If you’re using a work to for teaching, research, criticism or news reporting you’re probably in the clear. The Fair Use doctrine included in the copyright law allows people to reproduce works without the owner’s permission as long as they’re not in the business of selling it.

2. How much is used. While it may be alright to load a few bars of your favorite song onto a website, you shouldn’t put the entire three-minute piece up for everyone to enjoy. The same can be said for text: you can quote an article in your book, but can’t necessarily reprint the entire thing.

3. Effect on the owner of the copyright. If you’re putting something out there for free, you could be sabotaging the copyright owner’s livelihood and you can expect a cease and desist order in your mailbox.

4. Know Before You Go.Despite all the rules, copyright infringement is relatively common and, to a degree, accepted.

“If you look at the technical definition of copyright, you’ll find that people tend to get away with a lot,” says Todd Higgins, managing partner of the New York-based law firm of Crosby & Higgins, LLP. “The law doesn’t concern itself with minimal interests, and many cases never get brought to court.”

“It’s a question of risk,” says Higgins. “If you use someone’s work without their permission, you’re running the risk of statutory copyright infringement, and that’s nothing to play with.”

If you’re interested in using someone else’s work, here are three things that you can do to keep yourself out of legal trouble:

1. Find out who owns the copyright. The U.S. Copyright Office’s catalogue holds as many as 20 million registered copyrights. You can search by the owner’s name or by the name of the work by visiting their website at http://www.copyright.gov/records/.

2. Ask permission. Artists and composers create works so that they can be appreciated by a large audience. If you like, ask the artist before you capture it and you may get to use the image or music for free.

3. Consider alternative licenses. Obama artist Fairey could have avoided this legal dispute altogether had he chosen to license the image through Creative Commons. Creators who register their copyrights with this non-profit organization may allow artists and entrepreneurs to license their work and even improve upon it, as long as credit is given to the original creator.

4. Cease and Desist. Don’t ignore a cease and desist order. Statutory copyright infringement can run you anywhere from $750 to $3,000 in fines. However, if you ignore the order, a court may find you guilty of willful copyright infringement which can lead to as much as $150,000 in fines plus the cost of the copyright owner’s legal fees in addition to your own.

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