Knowledge Networks pays $300,000 to settle internal copyright complaint

Firm's marketing group distributed press packets to employees containing newspaper and magazine articles under copyright

Analyst firm Knowledge Networks has agreed to pay $300,000 to settle a complaint that it distributed news articles to its employees without permission of the copyright owners, a trade group announced Thursday.

The Knowledge Networks settlement is the first under the Software & Information Industry Association's Corporate Content Anti-Piracy Program, launched in October.

Knowledge Networks' marketing group had been distributing press packets to some employees on a regular basis, the SIIA said. Those packets contained articles under copyright and owned by SIIA members such as the Associated Press, United Press International, and publishing company Reed Elsevier, the trade group said.

SIIA litigation counsel Scott Bain called Knowledge Networks a "reputable company that made a very costly mistake." One of SIIA's goals for the settlement is to deter copyright infringement and educate other companies about the need for compliance programs, he said.

A Knowledge Networks spokesman declined to talk about the case in detail. "We are happy the matter has been resolved amicably," said spokesman Dave Stanton.

Knowledge Networks, based in Menlo Park, Calif., has agreed to take steps to avoid further problems, including sending its staff to an SIIA copyright course, SIIA said.

In a statement distributed by SIIA, Knowledge Networks said it regretted the actions.

"[We] disseminated copies of relevant newspaper and magazine articles in the good faith belief that it was lawful to do so," the company said in the statement. "We now understand 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."

Asked if internal distribution of news articles was commonplace at many companies, SIIA's Bain disagreed. "Companies do not do this all the time," he said. "Some companies have compliance procedures in place to keep it from happening."

Compliance procedures include staff designated for licensing and compliance, sufficient budgets for the content licensing needs of the company, education programs for staff, deals with major content outlets, and strict policies and internal penalties for violating copyright, Bain said.

SIIA learned about the situation through a confidential tip, the trade group said. The person who reported Knowledge Networks will receive a $6,000 reward.