Consulting firm pays $300K for illegally using copyrighted content

Computerworld - A California-based market research company has agreed to pay a $300,000 settlement for illegally distributing copyrighted articles, research reports and other information without proper licenses or permission to employees via e-mail newsletters.

The Software & Information Industry Association (SIIA), a Washington-based trade group for software vendors and content providers, announced Thursday (download PDF) that it had reached the copyright infringement settlement with Knowledge Networks Inc. in Menlo Park, Calif. The SIIA said it learned about the activities at Knowledge Networks after receiving an anonymous tip from an informant, who is being paid a $6,000 reward.

Scott Bain, the SIIA's litigation counsel, said the case is the first to be settled under a new Corporate Content Anti-Piracy Program, which expands the trade group's protective blanket beyond its existing software piracy programs.

"It recently became obvious that while there has been progress on the software side, there's another problem with infringement of [published] content," Bain said. Companies often use newspaper, magazine and newswire stories, newsletters, databases and other kinds of information without obtaining licenses or permissions from the content owners, he added.

"It's gotten worse with the advent of online delivery," Bain said. "It's just so easy to copy and forward [information] that people do it without thinking."

In the Knowledge Networks case, the SIIA said, company employees received e-mail messages with newsletters that included articles copyrighted by members of the trade group such as the Associated Press, Reed Elsevier and United Press International.

Knowledge Networks officials couldn't be reached for comment this morning. Yesterday, company spokesman Dave Stanton declined to talk about the case in detail when contacted by the IDG News Service. "We are happy the matter has been resolved amicably," he said.

In a statement to the SIIA, the company expressed regret for its use of the materials and said it would work to correct the problems.

"Knowledge Networks disseminated copies of relevant newspaper and magazine articles in the good-faith belief that it was lawful to do so," the company said. "We now understand that that practice may violate the copyright rights of those publications. We regret that those violations may have occurred, and we are pleased that this matter has now been resolved."

As part of the settlement, Knowledge Networks agreed to create an internal program to avoid future infringements. The program will  include educating executives and other employees about copyright compliance and licensing issues, and ensuring that proper licenses are obtained for use of copyrighted materials.

Bain said that the $300,000 payment being made by Knowledge Networks is "far more" than the materials would have cost the company if they had been acquired legally.

"We're hoping that this program and this case can serve an educational function," he said. "We're not out to get people, but to spread the word that companies need to pay attention to this conduct and correct it before it becomes a problem."

Grant Gross of the IDG News Service contributed to this story.

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