When The Postman Doesn’t Ring Twice
Dec 14, 2012
Our 3 top tips for avoiding litigation in copyright licensing
Earlier this year, our intellectual property lawyers were involved in a court case involving a photographer, a syndication company and a publisher.
The case came to us a little over a week before trial. We acted for the publisher. The lateness of our involvement in the matter for the publisher was but one complication in this matter which turned out to be something of a cautionary tale on the importance of clarity and certainty in contracts and particularly in copyright and copyright licensing.
This article draws on the main facts and arguments in the case to leave you with our 3 essential take home points. You post the contract, but what happens if the other party claims they never received it?
The publisher had a complex company structure which we have simplified for the purposes of this article. You can read the judgment which sets out the full facts here, but the key facts are:
- The publisher (“A Media”) engaged a freelance photographer (“P”) to photograph a personality. The resulting images were to be included in one of A Media’s offline publications (“B Magazine”).
- A Media and P emailed to organise the shoot including factual information about the set up of the shoot. Those emails did not include a contract.
- A Media prepared a contract to send to P by post. A term of the contract was the photographs which P took were to be used exclusively by A Media. It did not send it via email or by recorded delivery. At the time of the trial the individual responsible for sending the contract to P had left A Media and so it was not possible to obtain evidence from her that she had put it in the post. As such A Media was not able to prove that it had sent the contract. P claimed that he had never received the contract.
- During the shoot P worked with two employees of A Media to set up and choreograph the shoot and ensure that the images were appropriate for B Magazine.
- P delivered the photographs to A Media. A Media used the photographs in B Magazine.
- P licensed the syndication company (“Syndicate”) to make more revenue from the images by licensing them for use in other publications and online.
- A Media later used the photographs on a website of a sister publication to B Magazine.
Syndicate claimed that in using the photographs on the website A Media had infringed P’s copyright in the photographs. Ordinarily, if people wanted to use the photographs on a website they would approach Syndicate who would charge a royalty fee for their use. A Media had not paid a royalty fee.
The questions for the Judge boiled down to:
- Had A Media sent the contract to P? Was it binding on P?
- Had P agreed that A Media could exclusively use the images indefinitely?
- Had A Media, in putting the photographs online (and for a different publication to B Magazine) infringed P’s copyright and breached the terms of its licence?
There were supplementary questions as to whether A Media’s employees who had assisted on the shoot had been so involved in the creation of the photographs that they shared ownership of the copyright with P.
The Judge’s findings
The Judge found that A Media’s contract was not binding on P. The Judge accepted P’s evidence that he hadn’t received the contract.
Having found that there was no written contract in force, the Judge fell back to common law principles to determine the scope of the licence granted by P to A Media to use the photographs. The general principle is that where the court implies a licence term the licensee (A Media) should receive the minimum licence term required to meet the business necessity.
In this case, this did not extend to the use on the website of another publication and in so doing A Media had infringed P’s copyright. You’ll notice that A Media’s contract gave it an exclusive licence to use P’s photographs. If this had been found to apply, P may have breached the contract in granting a licence to Syndicate. If the contract had been in force the infringer may have been the claimant in this matter! We propose a slightly different way to deal with a headache...
Top 3 Learning Points: If you take anything from this tale, make it these 3 points:
- GET THE CONTRACT AGREED AND SAFE
If P and A Media had ensured that they had agreed the terms of the contract and each had a copy of the contract this need never have happened. If you are sending important documents ensure that they are sent through email, fax or tracked mail so that you know that they have been sent, and check that the other party has received them, then make sure they are saved.
- DUE DILIGENCE FOR YOUR INTELLECTUAL PROPERTY PURCHASES
If Syndicate had checked the status of the images when they had licensed them from P this may have raised its head earlier and been easier to deal with. If you are buying intellectual property always try to do as much research as possible.
- TALK TO A LAWYER
This may be the last thing that you want to do but it is better to talk to a lawyer sooner rather than later. As I mentioned at the beginning of this article, this matter came to us about a week before trial. To give two examples of why it would have been cheaper and more successful to talk to a lawyer soon about:
(1) Settlement: at this point, it is still possible to settle, but it can be harder than earlier in the dispute. This is because the parties may have already spent substantial sums on legal fees, in some cases will have already spent money on their barristers attending trial which cannot be recovered. The parties will be looking for significantly more money to settle than they would have been at the beginning.
(2) Bringing the best case: there is relatively little time to introduce new evidence. It can be difficult to find that evidence and if it can be found the court may refuse to allow the introduction of evidence late. The court gives a timetable for an action, including when to give evidence, and they do not have to allow late evidence.
Following our 3 take home points may help you avoid and deal with copyright (and other intellectual property) headaches before they become full blown migraines!