Hi Helpi
I spoke of caps on what settlements can be sought; some places now have "innocent infringer" provisions which have lowered the bar on what settlements can be sought in court in cases where the defendant was really a victim. In some places it's as low as $200 and as high as $2000.00, if I recall correctly.
The possible penalties for statutory damages ($30,000 for non-willful infringement and $150,000 for willful infringement) per work infringed are technically correct for some jurisdictions. However, it would be very extraordinary for such a judgment to be handed down. Readers here should visit Matthew's post "Recent Masterfile Federal Case Vindicates Our Position! A MUST READ". Masterfile was seeking $5,880.00 for alleged unauthorized use of
four images for three years. The defendant filed no defense and didn't even show up for court. The verdict? Masterfile got $1,120.00. Their lawyers got $4,860.00. So this should give a kind of benchmark of what to expect in a bad-case scenario. I pick on Masterfile a bit in this post; examples of Getty lawsuits are somewhat rare.
I do feel that there is ample evidence of Getty threatening to sue over the alleged unauthorized use of images that have not been registered as copyrighted. Certainly, any work is "copyright" by the artist at the moment of its creation. But, the artist in question would need to seek compensation in the event of unauthorized use, unless the rights were surrendered to Getty.
A very important point to note is that a company or individual can threaten litigation over practically anything at any time. One could even pay the nominal fee to the court and actually file a lawsuit even if there is no real intent to "go to court". Even if I knew that I would lose for sure in court, I could still do it as an intimidation tactic. That is, one can threaten litigation with no obligation to litigate and one can actually sue with no obligation to have a winning case, or even go to court. Many entities file lawsuits, and then the plaintiff lets the suit expire, or it's simply cancelled if the defendant comes up with a great defense. Getty needn't tell anyone that it doesn't have a solid case; they could even lie to you. Most of the money that Getty receives from this is from out-of-court settlements, so we can say that intimidation works quite well. In addition, remember that anyone on the Internet can pop out of nowhere, and say "That's mine. You owe me thousands". You'd better check out their claims in minute detail before paying. Now, I do not mean to make light of such threats or litigation. They do need to be taken seriously. As Oscar says, "don't let it come to a lawsuit". So, the best bet is to get solid legal advice about such matters.
Indeed one would not need to 'attack' Getty in court. If Getty were to come after you or me for say, $10,000, it wouldn't be unreasonable for us or our counsel to ask to see the contracts in question before paying. They may also back off if the contracts are crap.
As for the motivations for having strange or unexpected contracts, it happens all the time. People make mistakes, the documents weren't drafted by patent attorneys and some artists just consider their work to be their "baby" and don't want to give up all rights to it. Other artists want to use their work in other ways in addition to licensing it to stock art companies.
If we refer to Masterfile Corp. v. World Internett Corp. et al. (2001), points 20 through 33 ... 38: (I've underlined some important findings)
http://decisions.fct-cf.gc.ca/en/2001/2001fct1416/2001fct1416.html[20] Five Masterfile contracts with various artists were reviewed in connection with these submissions. They are: a Memorandum of Agreement dated April 19, 1985 between Masterfile and Daryl Benson (the "First Contract"; a Memorandum of Agreement dated September 1, 1988 between Masterfile and Wilhelm Schmidt (the "Second Contract"; a Memorandum of Agreement dated July 1, 1989 between Masterfile Corporation and Bruce Rowell (the "Third Contract"; a Memorandum of Agreement of May 1, 1994 between Masterfile and Paul Chen (the "Fourth Contract"; and a Memorandum of Agreement dated June 1, 1999 between Masterfile and Bruce Rowell (the "Fifth Contract".
[21] In the First Contract, the artist appoints Masterfile his sole and exclusive agent worldwide for the sale and licensing of all defined images. Provision 2.02 of the First Contract makes it clear that, in future, the photographer will execute any assignments or licences of copyright needed to give effect to a sale or licence of an image. Respondents' Counsel says that, if Masterfile was to be an exclusive licensee, the First Contract would so provide and there would be no need to involve the photographer in future copyright assignments.
[22] Respondents' Counsel also refers to provision 4.03 of the First Contract. Masterfile relies on its sole right to reproduce the images as proof of its status as a licensee but Respondents' Counsel notes that provision 1.01(a) states that the copies Masterfile makes must be clearly distinguishable from the originals. Respondents' Counsel submits that, since no licence is required to make a distinguishable image,
Masterfile's right to reproduce a distinguishable image does not support a finding that it is an exclusive licensee.[23] Furthermore, provision 5.01 of the
First Contract makes it clear that the artist and not Masterfile retains all present and future copyright.[24] Provision 7.03 of the First Contract deals with litigation and states in part that:
The Photographer grants Masterfile full and complete authority to make those claims and take such action as may be necessary (in the opinion of Masterfile) if there occurs any damage to, destruction or loss of any Material, or the unauthorized use of Agency Images by any third party. All amounts recovered by Masterfile in connection with any claims or action shall be apportioned and paid equally to the Photographer and Masterfile...
[25] Although it appears from this provision that the artist agrees that Masterfile will litigate alone over unauthorized use of an image, it is my view that,
because copyright stays with the artist, this provision is not sufficient to appoint Masterfile an exclusive licensee of the artist's copyright in the image.[26] The Second Contract also appoints Masterfile as the artist's agent and entitles it to make distinguishable reproductions of the images. As well, in provision 5.01,
the artist states that he is the sole holder of the copyright in the images. Again, Masterfile can litigate about unauthorized use but there is no provision for a copyright assignment for litigation and no reference to Masterfile as an exclusive licensee. Accordingly, it is my conclusion that this contract does not make Masterfile an exclusive licensee.[27]
The significant provisions of the Third Contract are similar to those in the First and Second Contracts and my conclusion about Masterfile's status is the same.[28]
In provision 2.01(a) of the Fourth Contract, the artist warrants that he is the sole and exclusive copyright owner. In provision 3.05(a), the artist agrees that copyright may be transferred to Masterfile if it pursues claims under provision 7.04. That provision gives Masterfile authority to litigate claims dealing with the unauthorized use of images.
[29] The second paragraph of provision 7.04 is the first version of Masterfile's deemed assignment clause. It reads as follows: "This section 7.04 will be deemed an assignment of copyright to the extent that such assignment is necessary in any jurisdiction to permit Masterfile to pursue claims on behalf of Chen [the artist]."
[30] Reading provisions 3.05(a) and 7.04 together, it appears that, in the future, two events are possible. Firstly, copyright may actually be transferred to Masterfile. Secondly, it may be deemed to have been assigned, so that Masterfile can litigate on an artist's behalf.
The clear implication, in my view, is that the artist will not be a party to Masterfile's litigation. If Masterfile does not sue, copyright remains with the artist. If Masterfile does sue, the deemed assignment only takes effect in jurisdictions in which, without the assignment, the artist would be a necessary party to an action.[31] Masterfile takes the position that, because it is the artist's exclusive licensee, it does not need to rely on the deemed assignment. It submits in the alternative that, if it is not an exclusive licensee, the deemed assignment gives it standing to sue for breach of copyright without making the artist a plaintiff in this litigation.
[32]
I have concluded that, under the Fourth Contract, Masterfile has not been made an exclusive licensee. Therefore, it becomes necessary to consider the validity of the deemed assignment. This will be done in the context of the Fifth Contract.
[33] The Fifth Contract was a new form of contract that Masterfile asked its existing and new artists to sign as of June of 1999. However, only forty-four of the forty-nine artists whose images are at issue in this case have given Masterfile a deemed assignment of copyright. Some of the forty-four only gave the deemed assignment after Worldsites and Taalwood began to copy the images. As well, the following five artists never had deemed assignment of copyright clauses in their contracts with Masterfile:
Paul Terpanjian
Larry Williams
Kerry Hayes
Bill Brooks
Wilhelm Schmidt
[34]
In provision 3 of the Fifth Contract, Masterfile is appointed as an agent, not a licensee. In provision 4, Masterfile acknowledges that copyright will remain exclusively with the artist. However, the artist agrees that at a future date he or she will assign copyright to Masterfile in certain circumstances that include litigation. In provision 4.5, Masterfile is authorized to execute on the artist's behalf any documents required to assure and confirm Masterfile's copyright.
.
.
.
[38]
Based on the Fifth Contract, it is again my conclusion that Masterfile is not an exclusive licensee. Further, although it could have taken an actual assignment of copyright in order to litigate without making the artist a party to the litigation, and although it could have executed such an assignment itself, Masterfile has not done so pursuant to provision 4.5.
Getting back to our discussion. In short, the finding was that
the plaintiff lacked capacity to bring suit on behalf of copyright holders. This case sets a precedent in Canada. Have the laws changed since 2001? Maybe. Have the contracts been improved? Probably. But, likely not in every single case. My point is that some good counsel and a little research can go a long way. Everyone should do this before writing a big check.
SG
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