October 13, 2026
Copyright infringement is using someone else’s protected work (text, images, code, music or video) without a license or a valid fair use defense. Every original work is protected the moment it’s created, so assume anything you didn’t make or license belongs to someone else. For a startup, the realistic risks are a demand letter over an image on your website, a takedown of your content, or a lawsuit with statutory damages of $750 to $30,000 per work, and up to $150,000 if the infringement was willful. The fixes are mostly cheap: license what you use, get rights from your contractors, and register a DMCA agent if users post content on your platform.
Key takeaways
A copyright owner can recover either actual damages plus the infringer’s profits, or statutory damages of $750 to $30,000 per work infringed, up to $150,000 per work for willful infringement. Courts can also order you to stop using the work, order infringing copies destroyed, and in some cases make you pay the owner’s attorney’s fees. Statutory damages and attorney’s fees are only available if the work was registered before the infringement began or within three months of publication, which is why many owners register.
There’s also a cheaper forum. The Copyright Claims Board, a small-claims tribunal at the Copyright Office, hears claims of up to $30,000 without a federal lawsuit. If you receive notice of a claim there, you have a limited window to opt out. Missing it means the case proceeds and you may be bound by the result.
Assume everything is protected unless it’s licensed to you or in the public domain. Use images, fonts, music and code from sources whose license you’ve read, and keep a copy of the license. Creative Commons and “royalty-free” licenses come with conditions, such as attribution or no commercial use, so check them.
Most startup infringement comes from people working for you: a contractor drops a found image into your website, or a developer copies code from a blog post. Your contractor and employee agreements should require them to use only material they created or properly licensed, and to tell you about any third-party material. See Startup Contractor Agreement. Open source code is licensed, but on conditions. See Open Source.
Fair use permits some uses for criticism, commentary, news reporting, teaching and research, but it’s decided case by case after a dispute arises. The Supreme Court’s 2023 decision in Andy Warhol Foundation v. Goldsmith narrowed the “transformative use” argument for commercial copying. Don’t build your marketing on a fair use theory.
Yes, in two ways. First, work generated entirely by AI without meaningful human authorship generally isn’t protected by copyright in the US, so you may not be able to stop others from copying it. Work where a person makes real creative choices, by selecting, arranging or modifying the output, can be protected to that extent. Second, AI output can closely reproduce existing images, text or code. Treat it like content from an unknown source and check it before you publish it or ship it.
Whether training AI models on copyrighted material is fair use is being litigated, and courts have reached different results. Ownership and infringement rules for AI content are a new area of law and likely to shift. Read your AI vendors’ terms on who owns output and whether they indemnify you.
If users can upload or post content on your service, the Digital Millennium Copyright Act (DMCA) gives you a safe harbor from infringement claims based on that content, but only if you qualify. Designate an agent with the US Copyright Office (the online filing costs $6 and must be renewed every three years), publish your takedown process in your terms of service, remove content promptly when you receive a valid notice, and adopt and enforce a policy of terminating repeat infringers. Without these steps, you can be liable for what your users post. See How to Draft Terms of Service for a Startup.
The most common version is a letter from a stock photo company or its collection agent about an image on your website, often one a contractor added years ago. The demand is usually negotiable, and taking the image down stops future liability but doesn’t erase past use. Comparison pages and competitor letters are different: they usually raise trademark or false advertising questions, not copyright, so don’t pull the page by reflex.
In the first 48 hours:
If the claim is valid, settling with a license fee is often cheapest. If it isn’t, a short response explaining why usually ends it. See our Contract Review service for help with the agreements behind the content.
Gather evidence first: screenshots, URLs, dates and copies of your original. If the copy is online, a DMCA takedown notice to the host (such as a web host, an app store or a social platform) is often the fastest fix. For a direct competitor or a commercial copy, a cease and desist letter from a lawyer usually comes next, and registration is required before you can sue in federal court. A license or settlement is often a better result than litigation, which is expensive and slow. See Should My Startup File a Copyright?
For the differences between the types of IP, see Trademark vs Copyright vs Patent and Startup Intellectual Property. If you’ve received a demand letter or need to stop a copycat, contact us.
