Article

Digital signage, live TV and the law

An attorney explores the ramifications of using TV content on digital signs.

November 13, 2007 by

Embedded high-definition content combined with television feeds from popular networks such as CNN, ESPN or MTV for example, enables retailers to draw customers in, promote products and specials, bring the retail environment to life, and generally enhance the customers' overall in-store experience. One popular method of display lets retailers display digital advertising around cable television content. While an effective and burgeoning market for advertising, this format is not without its potential legal implications. Before you run out and buy a set of monitors to display digital signage around cable television content, good planning and investigation into any legal ramifications should be your first step.

Common uses and copyright obligations

The concept of using television display in consumer environments has been around a long time, but it is only with the recent proliferation of affordable flat panel monitors that digital signage has become a marketing stronghold. Retailers are incorporating LCD or plasma display panels into store design; banks and financial institutions are incorporating televisions into lobby areas; even public spaces such as transit hubs, fast-food restaurants and gas stations are benefitting from the electronic medium.

As a communications tool, digital signage offers the ultimate capability: Retailers can deliver targeted messages as dictated by customers' interests, requirements and spending habits. Content is king. Promotions, announcements, product information, retail spots and brand loyalty messages permeate the consumer environment while cable television feeds offer entertainment.

However, with this amount of television content being pulled from numerous sources and providers across varying networks come considerable copyright considerations for the content user.

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When using a signage provider to access and deliver cable television content, it is important to be aware of the parameters of the contract between your provider and the cable companies. Often times the signage provider's contract with the cable provider includes a provision limiting use to "non-commercial" settings.

Even if commercial use is allowed, the subscriber — in this case the retail outlet — must obtain permission from the cable provider before such use is possible. Displaying cable television in a digital signage medium without express written permission probably would constitute prohibited commercial use and the subscriber would have breached its contract with the cable provider.

In addition to potential contractual violations the content user may have made, the Copyright Act may be implicated as well. The content in cable television is copyrighted in its entirety and the replaying of it in a digital signage medium constitutes what is known as a "secondary transmission." A secondary transmission in this case is the transmission of cable television broadcasts by the digital signage network simultaneously with the primary transmission from the cable channel itself. In other words, the digital signage network retransmits a cable signal simultaneously with the cable provider. The retailer's digital sign is duplicating the cable provider's service. This is where contractual and copyright issues come into play.

Potential pitfalls to avoid

Altering Content: According to copyright laws, any user other than the owner of the cable transmission does not have the right to alter the transmission in any way. This means that if the digital signage network in any way changes the original appearance or delivery of the cable content — for example by dividing the television screen into parts and displaying advertising around the cable content — the signage provider would be liable.

Licensing: If secondary transmission of cable signals, modified or not, is illegal, how do bars transmit sports events for patrons? Licensing. And the same applies to music. Bars and other venues license the right to play cable television for a fee. Ignoring an available license program and transmitting content without permission could result in fines or a lawsuit. One such licensing organization is The American Society of Composers, Authors and Publishers (ASCAP). ASCAP has been known to pursue even small, family-owned bars for copyright infringement actions.

Potential damages

If copyright infringement claims are brought and upheld, remedies could include actual damages, statutory damages and injunctions. In extreme cases, remedies also may include the impounding or destruction of the offending articles and charges of criminal liability. More often than not however, the copyright owner will seek monetary damages and an order, called an injunction, to prevent further infringements by the digital signage user.

Guest commentator Robert Scott is managing partner of Dallas-based Scott & Scott LLP, a legal firm specializing in IT compliance management.

Actual damages include profits earned by the user as a direct result of the digital signage displays. In such cases, it is imperative that the content user can deliver accurate records. The copyright owner is "required to present proof only of the infringer's gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work."

Statutory damages are determined by the judge. The guidelines dictate that damages may range from $750 to $30,000 per infringement, though if the court finds the content user acted willfully, that ceiling is raised to $150,000 per infringement.

The defendant in a copyright infringement case also may be forced to pay the plaintiff's court costs and attorney's fees, which, depending on the complexity of the case and the amount of work involved, could reach into the tens of thousands of dollars. Courts use a number of factors in determining whether to assess costs and fees against the infringer.

Protecting your businesses

Though there are some potentially costly consequences when discussing copyright infringement, businesses can take simple steps to mitigate these risks. Remember that with new technology and ingenuity also comes new considerations and obligations for both providers and users.

Conducting some research early into the benefits and pitfalls of digital signage is the first step in preparing a plan to ensure your business is protected. Retailers should carefully examine their subscriber agreements to determine the extent of their transmission rights. When reviewing these or any legal documentation, the advice of an attorney with expertise in licensing and copyrights can be an invaluable resource, and one well worth the cost to avoid costly mistakes down the road.