A Picture is Worth a Thousand..Dollars

January 5, 2011, 11:11 AM

The saying goes that a picture is worth a thousand words; this is even more true under copyright law, where the same picture may be worth thousands of dollars. Every year, many unsuspecting businesses hire web designers, graphic artists and other independent, creative people to design artwork and to take photographs for their business (Creative Products). After doling out substantial money for these Creative Products, the businesses devote additional resources to orchestrate expensive advertisement campaigns, websites and other critical branding materials based on the Creative Products. Having paid for them, the businesses own the Creative Products and can use and change them as they see fit---right? Wrong!

The copyright law lays a trap for the unwary. The owner of all rights under the Copyright Act is the authorthe person who creates the Creative Product. For purposes of the Act, an employer is the author for anything created by an employee acting within the scope of his or her employment. But where a Creative Product is created by an independent party (not an employee of the business) hired by the business, copyright rights in the Creative Products remain with the independent party even if the business pays money for the creation unless there is a transfer of all such rights in writing.

This can happen, for example, where the Creative Product is purchasedbut for a limited use (e.g. single run print use of a photograph), where the Creative Product is used for a different purpose (e.g. originally for advertisement in newspaper but thereafter used on a website), or when the Creative Product is subsequently altered (known as a derivative work) for a different use by the business or a different creative entity on behalf of the business. Since ignorance is no excuse (although it can help hold down damages) under the almost strict liability of copyright law, a dispute down the road can expose the business to substantial damages for copyright infringement for using something for which it has paid good money. Damages include statutory damages, actual damages and attorneys fees (if the Creative Product is registered with the Copyright Office before the alleged infringement.)

So be sure to read and understand the rights you are purchasing under the terms of any sales receipt, invoice or contract from the creative entity. Be sure to understand the uses you may make of the Creative Product. Where possible, insist upon a written agreement signed by the independent, creative entity that assigns all rights, including copyrights, in the Creative Product to your company. Beware of any use of a Creative Product for which you do not have such a written assignment.

Stephen E. Noonais the head of Kaufman & Canoles Trial Section and Co-chair of its Intellectual Property Law and Franchising Practice Group. In his 24 years of practice, he has been counsel in hundreds of intellectual property cases in federal courts across the nation, including over sixty (60) patent cases in the Eastern District and is Fellow in the American College of Trial Lawyers. He regularly appears before the judges in all four Divisions of the Eastern District on intellectual property matters. --Stephen E. Noona