copyright
Making profit of copyrighted material - when exactly does it become illegal
<p>As I understand copyright is something that is inherent in creative work, as in, if you painted a picture you automatically "own" the copyright to it   without having to do anything extra. </p>

<p>Say I have a bunch of pictures that I know are painted by someone else. I want to make copies of them and sell them without telling the painter. Let's also say that the person who owns the pictures doesn't care about how they are used and whether someone's profiting from them, and hence doesn't do anything about it. </p>

<p>Is the act of making profit still automatically illegal in this case, or does it become illegal when the copyright owner tries to sue me? In other words, can I get arrested for the fact itself without anyone making an explicit claim? Can someone else make a complaint ("I know a guy who really painted that pictures!") that could get me arrested?</p>

<p>For context, there is an exhibition of Banksy works in Moscow, which apparently was organised without Banksy's consent. Trying to understand the law behind such exhibitions.</p>

<p>Thanks.</p>

<p>Making a profit does not make the act illegal: it is illegal without there being any profit. The act of copying without permission is what makes the act illegal. Profit might maybe enter into the matter if you are talking about the "<a href="https://law.stackexchange.com/tags/fair-use/info">fair use</a>" defense, since certain kinds of works can be partially copied for certain purposes. You could quote a few lines from a novel in a review, for instance. The judgment of whether a given act of copying without permission is allowed under fair use is complex and involves a balancing act. Profit becomes relevant in that a non-profit use favors fair use and a for-profit use disfavors it. Wholesale copying of works of art as you describe is illegal (is infringement).</p>

<p>However... "illegal" is a pretty broad concept. If you infringe on my intellectual property, you almost certainly will not suffer any consequences unless I sue you. Taking "illegal" to mean "in violation of the law", infringing copyright <em>is</em> illegal because it violates the law, but I have to make a federal case out of your infringement – I have to sue you. As it happens, it can also be a crime to infringe copyright, and in that case, the government and not the copyright holder pursues the matter. If a person <em>knowingly</em> infringes copyright, he might be prosecuted, thus the <a href="https://en.wikipedia.org/wiki/Megaupload_legal_case" rel="noreferrer">Megaupload case</a> which in the US is realized in the indictment <a href="https://www.scribd.com/document/78786408/Mega-Indictment" rel="noreferrer">US v. Dotcom</a>. Moreover, <a href="https://www.justice.gov/usam/criminal-resource-manual-1851-copyright-infringement-fourth-element-commercial-advantage-or" rel="noreferrer">profit motive is a required element</a> for criminal infringement. (Also note that you don't have to actually make a profit for the profit element to be present).</p>

<p>You cannot sue a person unless they have harmed you, so if you know that Smith copied Jones' work you can't sue Smith for harming Jones. (This is what they call "standing"). You might sue Smith, but not for infringement itself. If they sold you an illegal infringing copy, then you could sue. Or, their infringement could diminish the value of your legal copy. </p>

<p><a href="http://www.inhouselawyer.co.uk/wgd_question/are-there-criminal-sanctions-for-infringement-of-any-intellectual-property-rights-and-if-so-what-are-they-and-how-are-they-invoked/" rel="noreferrer">This website</a> gives a multi-nation overview of criminal copyright infringement laws.</p>

<p>@user6726 does a great job of accurately answering your other questions, but doesn't really answer this one.</p>

<blockquote>
  <p>For context, there is an exhibition of Banksy works in Moscow, which
  apparently was organised without Banksy's consent. Trying to
  understand the law behind such exhibitions.</p>
</blockquote>

<p>Once someone sells a work of art, that owner of the art can still display it without the artist's permission, even for profit (this is closely related to the "<a href="https://www.justice.gov/usam/criminal-resource-manual-1854-copyright-infringement-first-sale-doctrine" rel="nofollow noreferrer">first sale doctrine</a>"). </p>

<blockquote>
  <p>The first sale doctrine, codified at 17 U.S.C. § 109, provides that an
  individual who knowingly purchases a copy of a copyrighted work from
  the copyright holder receives the right to sell, display or otherwise
  dispose of that particular copy, notwithstanding the interests of the
  copyright owner. The right to distribute ends, however, once the owner
  has sold that particular copy. See 17 U.S.C. § 109(a) &amp; (c). Since the
  first sale doctrine never protects a defendant who makes unauthorized
  reproductions of a copyrighted work, the first sale doctrine cannot be
  a successful defense in cases that allege infringing reproduction.</p>
</blockquote>

<p>An exhibition is a display of originals with the permission of the current owners of those originals. Copyright pertains to making copies of protected work, not to the display or disposition of the originals.</p>

<p>The trickier point would be whether the owner of the original would acquire the right to photograph his own original work incident to ownership in the absence of an agreement to the contrary with the artist, for example, for use in an exhibition catalog or poster, perhaps on a theory of fair use, or perhaps on a theory of implied license.</p>

<p>I suspect that there is caselaw on this point, but haven't researched it.</p>

<p>While the first sale doctrine forbids an artist from holding onto display rights as a matter of public policy, it does not prohibit a sale of an original work from including a transfer of the copyright to that work or a license to make copies of that work, even if those rights could lawfully be withheld by the artist in a sale of the original work. </p>

<p>So, the question of whether there was an implied license to allow the owner of the original work to reproduce it for various particular purposes boils down to one of contract interpretation in the transaction by which the first sale of the original work from the artist to the first buyer of the work took place.</p>

<p>Also, the more likely it is that there was an implied license, even if it is not definitively established that there was one, the more likely it is that a court would find a reproduction to be fair use by the owner of the original.</p>

<p>The existing answers cover this fairly well, but it should be mentioned that if someone infringes copyright and <strong>does</strong> make a profit in the process, that can increase the damages owed if the copyright owner sues and wins. Under US law, damages can be </p>

<p>total profits made by infringer <strong>plus</strong> 
lost sales or other monetary damages suffered by copyright owner <strong>plus</strong>
statutory damages <strong>plus</strong>
punitive damages if infringement was willful</p>

<p>Not all of these will be included in every judgment, and punitive damages are grated only in rather serious cases.</p>
