Because of its commitment to keeping the digital contents accessible, institutional repository plays an important role in the long-term preservation of intellectual output of the institution. However, digital preservation in institutional repository is faced with severe legal issues, especially the intellectual property problems. This paper focuses on the copyright issues involved with long-term preservation of digital resource in institutional repositories. It begins with a brief introduction to the relationship between the institutional repository and digital preservation. Based on this background information, the paper analyzes the related laws and regulations in China that affect the long-term preservation of digital resource in institutional repository. Then the authors discuss in details what kind of the copyright risk there may be, if we realize the long-term preservation of digital resource in institutional repositories. There may be different legal hazards, according to the various types of the digital output collected by institutional repository. The paper ends up with several suggestions to avoid the legal risk in digital preservation of institutional repository. Firstly, to utilize fair use is a feasible way. Secondly, also most safely, is to get the permission from the copyright owner. This is involved in the long-term preservation contract and open license.