Stop the Fakers and Takers

Word Count: 1,309 Estimated Read Time: 5 ½ Min.

It takes immense effort to build a great brand; one that is recognized and beloved for their products.  Think Louis Vuitton, Nike, Tiffanys, Hermes, and Apple.   But, it can also be a brand that sells a service instead of a product, such as Amazon Web Services, PWC, UnitedHealth Group, Berkshire Hathaway, and financial giants like Visa, Mastercard, and American Express. These are big brands that have huge name recognition and a reliable customer base.  It takes a lot of effort to create brands that are loved and trusted.

But it takes even more effort to keep a great brand from being “infringed”, whether the brand is selling a product or service.  Copyright infringement is the unauthorized use of a brand’s original content—such as images, text, or videos— and affects the brand’s uniqueness and misleads customers. It can also diminish the perceived value of its Intellectual Property.Infringed is just a fancy legal way of saying “ripped off” or “borrowed without permission.” 

The Monetary Cost of Infringement

Safeguarding intellectual property is a never-ending battle that has become exponentially harder in the digital age.  Copyright infringement doesn’t sound like a big deal, but it is.  It costs U.S. businesses BILLIONS annually and affects not only big brands but mid-level labels and even startups.  It’s an equal opportunity threat.  While an exact total is difficult to pinpoint, many analyses have been done show that copyright infringement costs U.S. brands tens of billions of dollars annually in lost revenue, jobs, and overall economic activity. The costs are spread across a plethora of sectors, including consumer goods, services, music, film, television, computers, and more. 

The US Chamber of Commerce reports that copyright infringement costs the film and television industries between $29 billion and $71 billion annually. Digital piracy of video content alone is estimated to cost at least $29.2 billion in lost revenue per year.  And piracy of sound recordings causes an estimated annual loss of $12.5 billion in total output for the US economy. This includes $2.7 billion in lost earnings for the sound recording and retail industries.

A significant portion of brand-related losses comes from the trade in counterfeit products.  The US Chamber of Commerce estimates that counterfeit and pirated goods cost US businesses more than $200 billion annually.  Another report from the Department of Homeland Security puts the annual cost at over $131 billion.  The cosmetic industry alone is estimated to lose approximately $75 million per year.  These aren’t violations of patents… it’s unauthorized use of a brand’s original content—such as images, text, or videos.

In addition to direct losses, copyright infringement imposes other costs on businesses and the broader economy.  Litigation is expensive, with typical trademark infringement lawsuits costing between $120,000 and $750,000, and potentially millions in a trial.  There are also job losses.  More than 230,000 jobs are threatened annually by foreign digital piracy targeting the US market.  And over 750,000 jobs lost due to the trade in counterfeit consumer goods.  Copyright infringement can also harm a brand’s reputation and consumer trust.

Case Studies:  Music and Book Copyright Infringement Cases

The music industry lost 71,060 jobs lost to music piracy last year.  Of course, the digital age made infringement a much bigger issue for the music industry.  Who can forget the major case of Napster vs. The Music Industry.  Napster, created by Shawn Fanning, allowed users to share and download music files freely, sparking a revolution in digital music distribution. However, this also led to a surge in copyright infringement concerns raised by major record labels and artists.

In 2000, the Recording Industry Association of America (RIAA) filed a lawsuit against Napster, claiming that the platform facilitated mass copyright violations by enabling users to share copyrighted music without authorization. The case delved into the challenges posed by emerging digital technologies to traditional copyright models.  Napster lost.  In 2001, Napster was ordered to cease its file-sharing operations, marking a significant legal victory for the music industry. The case marked a turning point in the music business, fueling debates on the impact of digital sharing on copyright protection, artists’ rights, and the industry’s need to adapt to evolving technological landscapes. 

A more recent significant copyright case was the September 2025 landmark settlement where AI company Anthropic agreed to pay $1.5 billion to several authors and publishers for illegal downloading of copyrighted books.  Authors Andrea Bartz, Charles Graeber and Kirk Wallace Johnson filed a Complaint in court against Anthropic for copyright infringement in 2024. The class action lawsuit alleged Anthropic AI used the contents of millions of digitized copyrighted books to train the large language models behind their chatbot, Claude, including at least two works by each plaintiff. The company also bought some hard copy books and scanned them before ingesting them into its model. The company admitted to doing as much.  Rather than obtaining permission and paying a fair price for the creations it exploits, Anthropic pirated them.  Judge Alsup agreed with Anthropic saying the company’s use of books by the plaintiffs to train their AI model was fair use. However, the judge ruled that Anthropic’s use of millions of pirated books to build its models – books that websites such as Library Genesis (LibGen) and Pirate Library Mirror (PiLiMi) copied without getting the authors’ consent or giving them compensation – was not.  That part of the case still has to go to trial. And definitely not all cases of copyright infringement result in a win for the brands. 

Case Study:  Video/Film Copyright Infringement

Viacom filed a lawsuit against YouTube in 2007 claiming that the platform allowed users to upload and share copyrighted Viacom content without authorization. The case raised questions about the responsibilities of online platforms in checking copyright infringement and the application of the Digital Millennium Copyright Act (DMCA).  YouTube argued that it was protected by the DMCA’s safe harbor provisions, which shield online service providers from liability for user-uploaded content if they promptly remove infringing material upon notification. In 2010, the court ruled in favor of YouTube, emphasizing the platform’s compliance with the DMCA and that YouTube had no way of constantly pre-screening user-generated content.  The case set legal precedents for the responsibilities of online platforms in addressing copyright infringement issues, and the judge ultimately sided with YouTube, contributing to discussions on the balance between protecting intellectual property and encouraging online innovation.

Fighting Infringement is Not Optional

Clearly, it’s complicated and expensive to protect intellectual property.  But what’s the alternative?  Allow fakers and takers to just use brand content without permission?  Hardly.  While it is expensive and exhausting to continually fight copyright infringement, brands must do so.  While it may seem like a lot of hassle – especially for smaller and mid-sized brands — failing to protect intellectual property can lead to significant financial losses, reputational damage, and the loss of exclusive rights to your creative work. When another business uses a company’s protected content—such as original photos, website text, or software—it can divert customers and sales away from that business. Unauthorized use by competitors allows them to profit from your creative work without investing time or money in its creation, which directly harms the creator’s bottom line.

Also, failure to register and enforce copyright at the start leaves a company with a weaker legal standing and higher expenses if there is ever finally a need to sue an infringer. Registration, especially if done promptly, makes the brand eligible for statutory damages (which can be as high as $150,000 per willful infringement) and attorney’s fees, which can be difficult to obtain otherwise.

Last but not least, properly protected copyrights can be licensed to other companies for additional revenue. This is a missed opportunity if rights are not secured.  No company can afford to pass up on additional revenue streams.

Next week, we’ll look at three big steps companies should take to protect from copyright infringement.  Stay tuned!

Quote of the Week
“Strong copyright protection is not only compatible with future digital business models: it is an essential pre-condition for their success.” Mick Hucknall

© 2025, Keren Peters-Atkinson. All rights reserved.