Ramifications of Signing Getty Images' New Contract

Posted on 5/10/2001 by Jim Pickerell | Printable Version | Comments (0)



May 10, 2001

    [Note: The following is an analysis by the lawyer retained by StockArtistsAlliance
    (SAA) of the new Getty Images photographer contract. The SAA is a group of more than 500
    Getty Images photographers with Stone, TIB and FPG/VCG. These photographers have over
    70,000 images on the current Getty Images web sites which is about 37% of the total images
    online for these three brands. Combined the images these photographers produced were
    responsible for approximately $80 million for Getty Images gross revenues in 2000.]

The Steering Committee of the StockArtistsAlliance implores the world's photographic
community to pay close attention to the potential ramifications of Getty Images' new
contract for contributors. If you've been wondering about the specifics of this contract,
please read what we have to say.

In our opinion, signing the new Getty Images contract is not in any photographer's best
interests. Every photographer has an important business decision to make as Getty Images
tries to impose its new business model on independent stock photographers worldwide. These
comments are our interpretation of a legal review of the 33 pages of Getty Images'
documents: 18 pages in the Standard Agreement plus 5 pages each for the respective Brand
Agreements accompanied by 11 pages of Q & A representing Getty's own "nonbinding"
interpretations. This contract was recently reviewed by our retained counsel, Mary Luria of
Davis and Gilbert in New York City, who represents the more than 500 individual members of
the StockArtistsAlliance, all contributing artists to Getty Images' brands.

It is the opinion of the SAA Steering Committee and a majority of SAA members that this
contract is filled with convoluted legal jargon which is almost impossible for the lay
person to understand. In fact, our attorney, who is one of the world's most respected
intellectual property attorneys, had this to say about the new Getty Images contract: "Even
the most astute business person with a good grasp of legalese cannot understand what this
contract says. Even a paralegal would need an attorney's advice to fully understand this

It should be noted that the following synopsis of contractual terms and protocol describes
issues that are not necessarily new to the pending Getty contract but that, in some cases,
can also be attributed to existing contracts. Many of these issues have only come to light
at the present time as a result of analysis by SAA legal counsel and her recent review of
numerous contracts from the various Getty brands.

According to Mary Luria, if you sign the new Getty Images contract you will be agreeing to
the following...

1. You will waive all rights to receive credit for creating your images. Getty
Images worldwide, its subagents and its clients are not obliged to credit images with the
contributor's name. In fact, the photographer would waive all rights to be identified as
the creator of the very images s/he has given Getty Images to market. Getty and its brands
have the right to credit in their own names--indeed those names may be the only credit and
the photographer may be totally anonymous. (clauses 3.1-3.2)

The contract says Getty Images can do whatever they want to with your images. Clause 3.1
(Credit) describes how you will supply Getty Images with credit information but doesn't
obligate Getty Images to credit you as the creator. In 3.2 you waive your right to be
identified as the creator. You consent to Getty Images modifying (presumably altering or
combining yours with other images including those not your own -- even work-for-hire, 90/10
Getty financed images and other royalty free pictures) your images, specifically allowing
them to create derivatives. Further, it is clear that you would not own the copyright in
such derivative images--Getty or its client would. You cannot "pull" an accepted image, it
is Getty's for the duration of the contract plus a period of time that follows termination.
Getty, on the other hand, has total freedom as to how (and whether) to market your images
and can stop marketing any image at any time without returning it to you.

Moral Rights, in the US, are granted under 1990 legislation, the Visual Artists' Rights Act
(VARA). According to this law it may not be possible for artists to waive their moral
rights in a blanket fashion as presented in the Getty Images contract. The Visual Artists'
Rights Act clearly states that moral rights may be waived but the waiver must be very
specific: the creator must consent in a written and signed document specifically
identifying the artwork, the uses of that work, and with a clause limiting the waiver to
both aspects. Where the artwork is created by more than one author, any one creator's
waiver binds the group.

Getty Images is clearly reaching as broadly as they can, perhaps in violation of US law, in
order to make this rights grab. Outside the US, blanket moral rights waivers may well be
contrary to law.

2. Under the new contract Getty Images has broad publishing rights to create
products using a photographer's images. Getty Images can publish fine art editions (this in
contravention of the Copyright Act which specifically states that only the author may issue
limited editions and in quantities of 200 or less), art books, and documentaries using any
of the contributor's images.

The contract does not specify how a contributor would be reimbursed for these uses, if at
all. Getty Images could go into the publishing business and use your photos in books,
prints and other products and not pay you a cent for any of those uses. Free advertising
use is granted to all of Getty Images' divisions and its subagents, including use of the
creator's name amounting to an unpaid endorsement. Only use in the Getty annual report is
paid. (clause 3, Brand Agreement clause F).

3. The photographer will have limited rights to publish accepted images elsewhere.
In addition to fine art prints, you may publish images in books and documentaries that are
mostly about your own work, or on your personal web site, subject to Getty Images' consent
and this consent is revocable at Getty Images' sole discretion (clause 4).

4. While Getty Images is offering 50% royalties for analog licenses in a
photographer's home territory, they only offer 40% if a license is digitally fulfilled. For
all other licenses outside the photographer's home territory, digital and analog, the
photographer will be paid 30% (clause 5 and Brand Agreement).

In a conference call with financial analysts recently, Getty Images' CEO Jonathan Klein
stated that they were aiming to have most of their US licenses delivered digitally within
three years, European licenses within five years. We estimate that about two-thirds of
Getty Images' total licenses are in the United States & Canada. This means that
photographers who happen to reside anywhere outside the US & Canada will receive only 30%
of licenses from Getty Images' biggest market while photographers who happen to reside in
the US & Canada will earn substantially more money from their images. Getty encourages
digital purchases with pricing and discourages analog purchases with extra charges.

5. Getty Images can raise existing fees or add any new fees without restriction.
This includes new charges for things now done for free or not yet offered. Getty Images
history here is not encouraging. Stone photographers are now being charged, in some cases,
more than $1500 per catalogue image, an increase of over $1000 in the last 3 years although
this will now be reduced to $738 to start, but permits annual increases of 8%.

6. Many countries outside the United States & Canada typically apply a withholding
(income) tax on the total license amount that will be paid to foreigners. Under terms of
the new contract Getty Images claims all foreign tax credits. Photographers would not
receive any credit for foreign taxes paid by Getty Images and then credited back to Getty.
Getty Images retains the right to make the deduction before calculating royalty payments,
yet when they get the tax credit, Getty Images keeps the full amount (by comparison, under
the current FPG contract and the G40 Stone contract Getty Images does not deduct for
foreign taxes that they know will be credited back to them).

Therefore the photographer will not be receiving their rightful share of this tax credit.
Instead this windfall will go directly to Getty Images. In essence the photographer will be
losing upwards of 5% of the gross license fee without even knowing it or having it reported
on a Sales Advice or remittance report (clause 5.6).

7. Photographers will be able to audit Getty Images once in any two year period and
limited to the previous two years; and if 10% underpayment is found, Getty Images will
reimburse the photographer for the cost of the audit up to $5,000 (clause 5.8).

By comparison, many audit clauses in the rest of the industry offer annual audits for the
term of the contract or the statute of limitations, and 5% is the common overpayment
threshold that triggers the company to reimburse audit costs.

Getty Images' new contract is very limiting as to which of their records a photographer can
audit. Their clause regarding this does not indicate that the photographer's auditor may
review Getty Images' contracts with their subagents. This would severely limit an
auditor's ability to know whether or not the photographer is truly receiving his/her
rightful share of income earned on those images licensed in foreign countries. Getty
Images must pay a photographer whose audit found such discrepancies only when Getty and the
photographer agree on the amount or at the end of a potentially lengthy arbitration.

8. Getty Images assumes no responsibility for loss or damage to a
photographer's images. All of the photographer's rights to lost images in the past would
be waived under the terms of the new contract. The photographer would have little recourse
regarding any such losses. Many industry insiders have suggested that The Image Bank has
lost tens of thousands of images, perhaps forever. If this is true, those photographers
involved would have no recourse to sue Getty Images for damages if they sign the new
contract. A recent lawsuit against Getty Images by an Image Bank photographer was settled
in his favor, though the terms of that settlement are confidential.

Upon termination of the new contract, Getty Images would have up to 3 years to return a
photographer's images but accepts no liability for loss or damage. Bottom-line, Getty
Images has no obligation to return a photographer's images at all and, at most, agrees to
pay the photographer $100 per image up to $10,000 in all. However, as if in contradiction
to this statement, the contract indicates that by signing the agreement the photographer
also gives up any right to make such claims (clauses 6.1, 10.4).

9. Getty Images has "first right of refusal" of images if you receive any
confidential information regarding those images. Such information could be from
communication with an editor, access to their photographer web site or other information
that you may receive with or without your consent (clause 6.1.4).

(Please take note of this comment from our attorney: If you want
confidential treatment of your shooting information, you must stamp

"CONFIDENTIAL AND PROPRIETARY" on all submission material in addition to your copyright

Technically, if Getty Images were to say, "cows are in," then every cow picture the
photographer might shoot must be submitted to Getty Images first. If you suggest cows to
Getty, they have no obligations to you.

10. The photographer agrees to give Getty Images an absolute warranty that his or
her images do not infringe on any trademark or copyright. This represents a significant
increase in the photographer's liability.

Without any sensitive subject restrictions in place, the photographer would, in effect, be
promising that the model or property release s/he gives Getty Images allows for these
images to be used in any way without restriction by Getty Images and its clients, and that
images can be licensed for any use including sensitive subjects such as incest, rape, AIDS,
homosexuality, incontinence, etc., (clause 7).

This could potentially put photographers at great risk of law suits from models or property
owners represented in the photographer's images.

11. Photographers assume 100% of the liability if any of their warranties are
breached. In the event of any litigation, Getty Images would be able to withhold ALL
monies due to the photographer, and there is no limit on how long they could withhold
royalty payments to the photographer.

Although the photographer assumes the risk and would be paying the bills, Getty Images, at
its sole discretion, has the right (but not the obligation) to defend against claims or
settle any claims associated with the photographer's images.

The new contract would make the photographer totally liable. Getty Images would have
little, if any, incentive to keep settlements low. In this contract the photographer holds
Getty Images harmless for all infringements or breaches of warranties, yet Getty Images has
the sole right to make all settlements on the photographer's behalf. The photographer
doesn't even have the right to defend him or herself.

Even if the photographer's warranties are NOT breached, as would be the case if the
photographer had a Getty Images-approved valid release, the photographer could still bear
50% of the risk if the law changes and a general release is required for models and/or
property (clause 9). Photographers may now be responsible for half or more of such
settlements, though they have no right to participate in the negotiation of the settlement.
Getty presumably carries insurance for such losses and has the money to pay the premiums,
while many photographers self-insure.

12. By signing Getty Images' new contract the photographer agrees to be personally
liable. This means that even if a photographer were contracted with Getty Images through a
company, corporation or trust, she/he could be still be personally sued and his/her
personal assets would be at risk (clause 11.6).

13. By signing the contract the photographer agrees that s/he cannot sue Getty
Images and that any dispute must be settled by arbitration in Seattle or New York. This
puts photographers living outside those two cities at a great disadvantage. For any legal
action between Getty Images and a photographer living outside the United States it would be
so expensive as to be impractical to challenge Getty Images on even the largest legal
issue. Were Getty Images to take action against a photographer living outside the US, the
expense of the defense could potentially result in severe financial hardship due to the
extreme expense of traveling and lodging while proceeding in a US court.

The contract states that if Getty Images were to prevail in any lawsuit, the photographer
must pay all or part of Getty Images' legal costs, including their attorney fees,
accountant fees, etc. Future class action suits and multiple plaintiff suits by
photographers may be precluded totally. (sections 11.8, 5.8)

Due to Getty Images' acquisition of large stock photo libraries in recent years, there may
be many areas of concern where Getty Images might be at great risk, such as the potential
lost Image Bank images. This new contract appears to be written to lessen Getty Images'
vulnerability to the contributor's disadvantage.

14. There is no time limit specified in the contract for Getty Images to review
images, market accepted images, or even return images to you except that the contract
states rejected images will be returned to the photographer within 30 days "after editing."
However, this is only a reasonable efforts obligation, not absolute. Getty Images could
keep a submission for review for as long as they wanted, and there is no time period
specified as to when an accepted image would be uploaded or marketed. Meanwhile the
photographer cannot market the image elsewhere. (section 6)

If Getty Images were to reject images for your brand, if you've signed any of the other
Brand Agreements as well, then Getty Images could potentially move these images around the
editing departments of the various brands involved for an indefinite period of time,
effectively keeping your images out of the marketplace and out of it's competitors' hands.

15. Getty Images has removed its status as "agent," which also effectively removes
many fiduciary responsibilities it had under previous contracts. Getty Images has no
obligation to use its best efforts or commercially reasonable efforts on behalf of
photographers to market your images. This means that a photographer would have no recourse
if any preferential treatment was ever shown in marketing any other images for any reason
whatsoever (Brand Agreement section C). This means Getty Images could promote images that
it makes more income from (the so-called 90/10 images) at the expense of your 50/50 images.

16. The new contract also indicates that in the event of extraordinary losses by a
photographer's "brand company" including subagent or client bankruptcy, the photographer
agrees to forfeit payments due. This is in contravention of their promise to shield you
from bad debt risk (clauses 10.6, 5.7).

In short, this contract arrogates all rights to Getty Images while making no obligations to
the photographers.

It is extremely important that all photographers fully grasp the
ramifications of signing the new Getty Images contract. We feel that this is a bad deal
for photographers and while each photographer must make his/her own decision as to whether
or not they want to move forward with Getty Images, we cannot recommend signing this
contract in its current form. This contract's fate will have major impact on the stock
photography industry as all others follow the industry leader.

The above comments are the opinions of members of the SAA Steering Committee and are not
necessarily the opinions of all SAA members, though a consensus of our membership shares
these views.

The StockArtistsAlliance is endorsed by the American Society of Media Photographers (ASMP),
the Advertising Photographers of America (APA) and the Association of Photographers in the

From the SAA Steering Committee:

Glen Allison

Gary Buss

Cosmo Condina

Peter Dean

Wayne Eastep

David W. Hamilton

Mark Harmel

Gary Holscher

Kevin Kelley

Fred Licht

Dick Luria

Butch Martin

Steve McAlister

Joseph Pobereskin

Robert Rathe

Ken Reid

Harry Sieplinga

Stephen Simpson

Copyright © 2001 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


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