376 ASMP FILES SEC COMPLAINT AGAINST GETTY IMAGES
February 6, 2001
The American Society of Media Photographers, ASMP, has filed a complaint with
the US Securities and Exchange Commission, SEC, against Getty Images, Inc. for
failing to report to the SEC a suit involving copyright infringement, false
designation of origin, breach of fiduciary duties and breach of contract with a
photographer represented by Tony Stone Images (TSI), an agency owned by Getty.
The trade association went to the SEC because of the potentially industry-wide
ramifications of the outcome of a suit by Penny Gentieu and Getty's failure to
mention the suit in filing reports required by the SEC, according to ASMP
executive director Richard Weisgrau.
Weisgrau said, "We believe that a legal decision that is unfavorable to Getty
could easily result in a host of similar suits from photographers that in the
past held, or currently hold, contracts to supply it with photography. If that
were the case, it could result in Getty's contracted sources of supply
withdrawing licensing authority from Getty and terminating the relationships.
This could have devastating consequences on Getty's financial position, in
that, the case could result in an award in excess of $2 million, plus
attorneys' fees and costs."
Weisgrau urged the SEC to investigate why Getty Images did not disclose this
lawsuit, which does have the potential for substantial consequences. "Getty
might use the excuse for not mentioning the suit because, in their view, it
would have no material effect on the company. ASMP would disagree strongly with
such a position," said Weisgrau.
Photographer Penny Gentieu, well known for her distinctive style of baby
photography, sued Getty Images on "copyright infringement resulting directly
from many breaches of duties of Getty as an agent, its financial accountability
to its principals, its breach of contract by misrepresentations and bad faith
The Gentieu litigation has been filed in the U.S. District Court for the
Northern District of Illinois as Gentieu, et al v. Tony Stone Images/Chicago,
Inc. and Getty Images, Inc. No. 00 C 0269 (N.D. Illinois).
As a publically traded company Getty Images must disclose all lawsuits that are
likely to have a marerial impact on the company. In past filings Getty has
listed a number of lawsuits that are covered by prior indemnification or
current indemnification agreements and other suits, one of which - against
another Getty company, art.com - did not even name Getty as a defendant.
Weisgrau said, "In our opinion, it seems to be listing suits of little
financial consequence to Getty by virtue of the indemnifications in place or
being sought." He went on to point out that the Gentieu suit, in which there
is no possibility of indemnification, is not listed.
ASMP believes that if Gentieu prevails, the consequences for Getty are likely
to be far reaching. "Not only will Getty and its subsidiary Tony Stone (now
known as Stone) be liable for substantial monetary damages, but they will also
be vulnerable to similar suits, perhaps even a class action suit, by other
photographers whom they represent or have represented in the past," said
Gentieu has been represented by Tony Stone Images since 1993 and came under the
Getty Images umbrella when Getty acquired TSI in 1995. In 1998, just after she
refused to sign Getty's new photographer's contract, Gentieu began to notice
both a slump in her sales and copying of the look and feel of her famous,
distinctive baby pictures.
Whereas other photographers were featured prominently in Getty's web pages and
catalogs, Gentieu's photographs were being marginalized, even though her 1993
contract with TSI was an agency contract and included a "best efforts to sell"
clause. Then, she found out that one company had licensed and paid TSI/Getty
handsomely for rights to use one of her photographs. When she complained
directly to the TSI/Getty accounting department that she had not been paid,
TSI/Getty suddenly sent her a check for her share of the license proceeds.
Gentieu then started carefully reviewing all documentation sent to her by
TSI/Getty and saw cancellations followed by re-issuance of licenses for less
than original license sales, double subtractions from the Los Angeles and
Chicago offices of Getty and many other discrepancies. Because her 1993
contract permitted it, she demanded an audit of her TSI/Getty account, but was
prevented from seeing the very documents that would enable her to untangle the
accounting snags she had already identified.
Subsequently, Gentieu sought assistance from ASMP and hired Chicago copyright
attorney Patricia A. Felch of Banner & Witcoff, Ltd., to represent her. Felch
also represents writer Jonathan Tasini in the highly publicized case against
the New York Times over electronic re-use rights of freelancers' articles.