Bo's bLAWg: What might that ‘infringing' legal language look like?

 

Question: What might that ‘infringing' legal language look like? - Leslie.

This question has a few different answers depending on what aspect of “infringing legal language” it pertains. There are actually two different issues that immediately come to mind.

The first is the Artist’s warranty to the licensee manufacturer or publisher that the licensed illustrations are original and do not infringe upon the rights of any other person or entity. This is a legitimate concern of the Licensee, and they can reasonably expect that the Artist indemnify them and their sub-licensees from any damages that they might incur due to such an infringement. That will usually include responsibility for their attorneys’ fees and costs in defense of any such claim.*

Keep in mind that just because your work might be “substantially similar” to that of another artist, it is not legally infringing unless “access” to the original copyrighted work occurred. Those are the two elements needed to prove any copyright infringement claim. If the plaintiff claiming an infringement of their copyrighted work cannot prove access and substantial similarity, then no infringement can have occurred.

The other “infringer” issue pertains to who has the right to bring an action if the Licensor Artist’s copyright has been infringed by a third party. Usually, this will be in the context of a competitor of the Licensee, but the provision can be drafted so broadly that if the licensing Artist is not careful, her copyright infringement claim can be exercised by the manufacturer or printer whether or not the infringement involves competing goods to theirs.

So, first, the third party infringement rights provision should be edited to limit the Licensee’s rights to bring legal actions to those having to do with infringement in conjunction with competing goods.  Second, the Artist wants to make sure that she has the right to participate fully in the action as a party plaintiff.  Often, the manufacturer’s License template will say that the manufacturer alone can bring an action and it alone obtains the benefits of the action.  This can create a windfall recovery for the manufacturer in which the Artist does not share whatsoever!  If the infringement has resulted in a substantial loss of the licensed manufacturer’s sales, then the Artist will have been deprived of her royalties on such sales.  There is no legitimate basis to deny her right to share in such a recovery.

In fact, even if the infringer has made no profits on its use of the Artist’s copyrighted image, an action for willful infringement can be the basis for a judgment of up to $150,000 in statutory damages, plus reimbursement of the plaintiff’s attorneys’ fees and court and discovery costs.**

Keep in mind, even if the defendant has limited assets of their own, they may well have an insurance policy that provides coverage for negligence like an infringing use of a copyrighted work by a company employee.  If that use was “intentional,” as it typically is, the otherwise negligent act still provides a legal basis to claim statutory damage limits as willful use!

The best provision regarding action on infringements against such third parties allows the Artist to be an active participant if she wants to, and to be a passive participant if she prefers, and to share 50/50 in the net recovery after payment of attorneys’ fees and costs out of any settlement or judgment. In the event of a negotiated settlement, she wants the right to approve the terms of settlement as they directly affect her interests.

Alternatively, if the manufacturer or publisher Licensee elects not to pursue the infringement claim, the provision should include timely notice to the Artist so that she can pursue that claim herself should she want to. She has not only the prospects of obtaining a substantial settlement or judgment for herself, but it is possible if not likely that she will find a copyright litigator who is willing to take the case on a contingent fee basis. If she does not prevail or settle, she will have no attorney’s fees to pay. If/when she does settle or collect a judgment, the attorney is paid out of that judgement, usually 40-50 percent.

If the infringement has been widespread and the Artist’s loss of royalties and/or license fees substantial, including use beyond that licensed to the manufacturer, she might even be able to settle or obtain a judgment in excess of the statutory fees maximum of $150,000 per infringement. She cannot know the value of the claim without some investigation of the scope of infringing activity; an investigation which Licensees often do not bother to even consider.

In summary, make sure you look carefully at any infringing activity that involved your illustrations, and don’t give up those rights to the Licensee without a fight to share in the prospects and benefits.

* You may want to make sure that such indemnity provisions do not include “claims” against the manufacturer or publisher as distinguished from an actual breach of the warranty. Anyone can claim their work has been infringed. However, if there has been no access and the similarity is not the result of copying, then the manufacturer is in a much better position to defend a meritless infringement claim than is the artist. At least that’s my argument in negotiating edits to that provision of the License Agreement.

**Remember, to qualify for statutory damages and prevailing party attorneys’ fees and costs, the Artist must have registered her copyright in the infringed illustration before the infringement occurs, or within three months of its original publication. Otherwise, only the infringer’s profits can be awarded under the US Copyright Act, and fees and costs will be out-of-pocket.

If you have further questions about this that you want to direct to me personally, I can be contacted through my website linked below. 

Disclaimer: The information contained in this website is not intended as legal advice. Because the law is not static, and one situation may differ from the next, we cannot assume responsibility for any actions taken based on information contained herein. Also, be aware that the law may vary from state. Therefore, this website cannot replace the advice of an experienced attorney. Receipt of this information does not create an attorney-client relationship. MJ Bogatin, Bogatin, Corman & Gold, www.bcgattorneys.com.

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