3 Business Lessons From Michelle Phan's YouTube Copyright Suit

YouTube star Michelle Phan has been slapped with a copyright-infringement lawsuit over her use of background music in her makeup tutorials.

The do-it-yourself online makeup sensation is accused of rising to commercial success by illegally using copyrighted music by artists like Deadmau5 and Kaskade in her videos. While Phan insists she didn't infringe on any copyrights, business owners may be wondering: Isn't there a way for entrepreneurs like Phan to use music without being sued?

Learn from Phan's copyright suit with these three business lessons:

1. Be Careful With Background Music.

In case you're not familiar with Michelle Phan, here's one of her clips from YouTube:

Like Phan, your business isn't likely to be using music directly in order to sell your goods or services. It may just exist pleasantly in the background of your office's waiting room or restaurant dining area. But be warned, using background music like this without a performance license can get your business sued.

Unlike consumers listening to music, if a business chooses to play copyrighted music without permission, it may be infringing on the artist and record label's copyrights. Organizations like BMI will sell music performance licenses to certain bars, restaurants, and clubs for a fee, allowing them to play recorded music, TV, and radio without infringing on copyrights. Without this license, your business could be vulnerable to lawsuits by artists and their respective record labels, simply for playing the radio in the background of your small business.

2. Know What's Considered 'Fair Use.'

But what about fair use? Employers may be able to get away with using music -- and perhaps so can Phan -- if a court affirms that the use of copyrighted music was fair use.

Courts tend to look at these four factors when determining fair use of copyrighted material:

• The purpose and character of your use. Was your business using a song to create something entirely new, or was it just a copy?
• The nature of the copyrighted work. Creative works get more protection than non-fiction ones.
• The amount/duration of the music used. Rappers who "sample" songs test this limit all the time. The less copyrighted work is used, the more likely it is fair use.
• The effect of your use on the market value of the original work. Does your use diminish the market value of the copyrighted work? Phan will likely argue that her use didn't stop the songs used from being licensed to other YouTube content creators.

3. You'll Want a Lawyer on Your Side.

We aren't sure if Phan has counsel, but your business should. Consult with a copyright attorney if you have any doubts about whether your next business move could end in a copyright suit.

Related Resources:

• Romney Ad Deemed 'Fair Use' Under Copyright Law (FindLaw's Free Enterprise)
• Beastie Boys Sue Monster Energy, Win $1.7M for Infringement (FindLaw's Celebrity Justice)
• Legal How-To: Responding to a DMCA Takedown Notice (FindLaw's Law and Daily Life)
• Is it Illegal to Remix Music? (FindLaw's Law and Daily Life)