Unauthorized Use Settlements Grow

Posted on 6/16/2010 by Jim Pickerell | Printable Version | Comments (0)

U.S. educational publishers are admitting to more and more unauthorized uses during the past decade and quietly entering into out-of-court settlements with an increasing number of image suppliers for large numbers of uses. In cases where the original license fee was well under $1,000, publishers are now paying multiple thousands of dollars to settle claims.

In virtually all of these cases, the publisher originally licensed the images for narrowly focused uses, such as North American rights with a limited circulation—sometimes 40,000 copies. The publisher then proceeded to print many more copies of the book than originally authorized, and in some cases, to distribute the book outside of North America, and also use the images on the Internet without license.

A couple years ago, several major image suppliers began to realize that use in excess of their licenses was taking place. This was not just happening at a single publisher, or on a single project, but seems to have been a rather common practice at most of the major publishers.

As a result, several legal actions for copyright infringement were initiated. Some are still ongoing, and many have been successfully settled in favor of the plaintiff. In pre-trial arguments in many of these cases, the publisher’s legal teams presented a number of arguments for why they believed the uses made did not violate the terms of the license agreements, despite clear language to the contrary. In nearly all cases, the courts have found in favor of the plaintiff.

As a result, publishers have now recognized that they are at fault and are trying to make restitution.

Publisher dilemma

In many cases, publishers want to continue printing more copies of the books. Based on what has taken place, they can no longer argue that their previous actions were simply a misunderstanding of the rights originally granted. Thus, before they make any future use of the same images, they must come to some agreement with the copyright holder for the past uses.

As a result, they are asking for the right to print significantly more than the first printing, and in many cases for unlimited electronic use for 10 years or more.

Upon receiving such a request, the first thing a potential licensee should ask is, “How many of these copies have already been printed and/or distributed?” Normally, the researcher making the request will not have the answer, and the publisher will not immediately supply this information. However, if the image owner agrees to sign a non-disclosure agreement, publishers are usually willing to supply such information.

If there has been a distribution beyond the original license, the image owner should then determine if there has been distribution overseas or on the Internet that is beyond the terms of the original license.

In negotiating a fee for any unauthorized use, the image licensee should recognize that in such cases it is standard industry practice to grant a “retroactive license” for 10 times what the normal fee for the use would be. Such negotiations can often be handled without the aid of a lawyer, or the necessity of bringing an expensive copyright infringement action.

Publisher tactic

When faced with such demands in the past, publishers would often say, “OK, we’ll pay what you demand, but we will never use you again.” Unfortunately for the publisher, given the way the industry is changing, that threat now has a hollow ring. The education industry is rapidly moving toward using fewer books and distribution of electronic educational material online. Thus, when the current licenses for uses in printed books expire, there may not be much more demand for new or updated books on paper.

As a result, many sellers are saying, “Fine, just pay me now.” And as it turns out, they also continue to get future requests, because they still own the images the publisher needs.

A few agencies are settling these cases for the normal fees they would have charged the publisher if there had been no unauthorized use. The logic for their approach seems to be that the publisher will use their images to a greater extent in the future—and to some extent, that seems to be working. But it is certainly a disservice to the image supplier, who has not been adequately compensated for the use of an image that is already in the book.

Copyright © 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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