According to the allegations in recent litigation, Pearson played fast and loose with the photography it procured for use in its books. The giant publisher would arrange to use selected photos from a photographer or stock agency and, by under reporting its usage needs, get access to high-resolution copies of the photos at a lower price than it would have had to pay if it had accurately disclosed the uses it planned.
According to the complaints, Pearson would then put the high-res images into its own digital asset file, where it maintained them for future use, sometimes reporting the new or expanded use and paying additional fees later, sometimes not.
The result of this chicanery has been that Pearson has been sued for copyright infringement over the last few years in more than a dozen federal courts across the country, from Hawaii and Alaska to New York and Pennsylvania. The claims in these cases include allegations that Pearson’s infringing conduct was pervasive and willful, raising the prospect of statutory damage awards of up to $150,000 for each work infringed, and thousands of images are at issue across the cases.
If Pearson loses these cases, it will be exposed also for the attorneys’ fees and costs of each of the many plaintiffs. What’s more, the plaintiffs in some of these cases have also named Pearson’s printers as additional defendants, and Pearson will likely have to bear the cost of defending and indemnifying all of them.
While the smaller scale of operation makes it unlikely that any reader of the Independent will get into water as hot as that in which Pearson is currently stewing, licensing third-party photography is so complex today that it’s worth taking a few minutes to review the basics and get familiar with the terminology.
Categories of Use: Editorial vs. Commercial
Professional photographers and stock agencies group their work into three broad categories based not on the nature of the photos but instead on the use to which the photos will be put: editorial, commercial, and retail.
Retail use concerns photography commissioned for personal use, so it is of little consequence to book publishers—except, perhaps, for that studio portrait supplied for the back cover by your author, who may not have obtained the necessary rights.
Editorial use concerns photography that will be used in a book, an e-book, a magazine, online, or in a presentation or video that is journalistic, educational, or expository in nature.
Commercial use concerns photography that will be used in advertising and promotion to sell or market a product (including a book), a person (including an author), a company (including a publisher), or a service (including editing, design, and distribution).
The distinction between editorial and commercial is particularly important because commercial uses typically have a significantly higher price tag than editorial uses. And it is not always easy to draw the line between the two. While the use of a photo in the interior pages of a trade book is almost certainly editorial, the use of a photo on your Website may be editorial (if it is associated with content presented there) or commercial (if it is associated with a sales message). And if a Web page has both editorial and promotional content, it may not be easy to tell which predominates.
Likewise, the photo used on the cover of your book is editorial, but a shot of the cover of your book (with the photo incorporated) appearing on an Amazon page offering the book for sale maybe be defined by your license as an unincluded, secondary use that is commercial.
Categories of Assets: Royalty Free vs. Rights Managed vs. Commissioned Work
Royalty Free and Rights Managed are terms that refer to the general scope of the license granted.
You need to understand first that Royalty Free doesn’t mean free. Instead, it describes a license that provides for an up-front, one-time payment in return for which you get relatively broad, nonexclusive usage rights. The obvious advantage to a Royalty Free image is that you pay a relatively small fee one time in return for the right to make multiple uses of the image.
However, license terms vary from vendor to vendor, so even a Royalty Free license for an image may sometimes impose some sort of limit on the use that you can make of that image in terms of number of copies or length of time or medium or purpose.
The disadvantage of Royalty Free images is that the rights you get are nonexclusive, so that the image you select is also simultaneously available to others. And the others who find it may have used some of the same search terms you used, which means that the same image may show up on the cover of a competing book or in an ad for a related product or service. The odds of that are better than you might think.
Commissioned work is the most expensive, whether it is purchased outright or exclusively licensed. Because commissioned work refers to images staged or shot just for you, the photographer’s price to you will have to cover 100 percent of the value/cost of producing them. You can pay this entire price up front in return for an assignment of the copyrights to the work. Or you can pay it one use at a time, for a series of exclusive licenses as your needs arise.
Rights Managed licenses occupy a middle ground between Royalty Free and commissioned work. Rights Managed images are selectively licensed for exclusive use limited by market, by length of time, by geographic territory, by medium, and so on. Because the photographer or agency expects to spread the cost over several separate licenses during the life of the image, the price is substantially less than comparable commissioned work. And a competing use of the same image is essentially impossible.
Limitations on Use
So we have a spectrum of expense and associated rights from commissioned commercial work to Royalty Free work for editorial uses, but between the two ends of this spectrum the devil is, of course, in the details, largely because each vendor can and does impose its own limitations on use in a variety of forms.
Here is a non-exhaustive list of the possible restrictions you may encounter.
Location/placement. As in real estate, location is important. Whether an image will be used on a book cover, on a chapter opener, in an internal illustration, or on a Web page will affect the price you are charged.
Size. The size in which an image will be reproduced also often affects price. Size can be measured in terms of portion of a page (e.g., quarter page), or in inches (e.g., 5″ × 4″), or in pixels (e.g., 2,000 × 3,500 pixels). Be sure that any size limitation encompasses the maximum size your use might require.
Medium. The medium you will use to distribute your work makes a difference. Photographers are well aware that digital is more susceptible to unauthorized harvest and use than print, and they charge accordingly.
Quantity. Be sure that any quantity specified in a license comfortably covers at least your first print run (plus any allowable overage), and be equally sure to go back and get license extensions before ordering a subsequent printing.
Territory. Specifying world rights will certainly cover you, but it may mean paying for rights you don’t exploit. Determine differences in price and make your decision accordingly. Then don’t forget to go back for an extension if it turns out that you want to exploit an export opportunity.
Duration. Many licenses are described as perpetual or unlimited in time, but Rights Managed licenses have finite durations, and even some Royalty Free licenses have finite terms (e.g., seven or ten years or more) just to avoid open-ended commitments. Watch for these and arrange for reminders to pop up in sufficient time for you to get an extension or replace an image.
Versions. If a license contains a limitation on versions, make sure the limit encompasses the maximum number of design versions and editions, and any ancillary works in which the image will be used.
Language. Look for limitations on the language of the text in the work that will include the image, and think not just about the book’s language but also about the language(s) on Websites that may feature it.
Exclusivity. The meaning of nonexclusive is pretty straightforward but exclusive can be defined by any number of metrics. Make sure any exclusivity is clearly and unambiguously described.
The way a license expresses limitations is critical. If you see a term that is unfamiliar to you, consult the Picture Licensing Universal System (PLUS) terminology glossary, developed by a coalition of associations representing photographers and other affected constituencies (useplus.com/useplus/glossary.asp). And when in doubt, add your own definition somewhere in the purchase documents.
It would be terrific if you could find limitations on your license rights in just one place, but the terms of the deal are often widely dispersed.
Terms may appear in a pretransaction document that might be provided as a print or online form called a bid, a quote, an estimate, an assignment confirmation, or the like. Although such a document, in and of itself, is merely an invitation to negotiate and not a binding contract, your acceptance of the offer—either by issuing a purchase order or simply by making payment—will have the effect of incorporating the proposed terms, as well as any terms contained in any set of “Standard Terms” (or “Terms and Conditions”) attached to the offer document. (For some tips on how to counter these one-sided terms, see “Add Power to Your Purchase Order Form: A New Year’s Resolution Worth Keeping,” in the January 2011 Independent.)
Terms may appear in a formal license document. Especially if your transaction is effected online, you will probably be asked to click your assent to one of those documents as a part of completing your purchase. Don’t do this until you haveclosely examined the terms of that license that just flashed by.
And sometimes terms first appear in a post-transaction document, such as a delivery memo, change order, or invoice. Although you can’t be forced to accept these terms if they were not disclosed prior to your commitment, you will likely have assented to those after-the-fact restrictions if you pay the invoice without examining it and making or arranging for changes.
What happens if, despite your best intentions, a restriction escapes your notice and your lapse is detected by the photographer or stock agency? Well, about the best you can expect is that you will be deemed in breach of your contractual commitment and held to account for what you should have paid for the uses you actually made.
More likely, the licensor will claim that you made an unauthorized and infringing use of a copyrighted work outside the scope of any license you had. In this event, the copyright owner has some very potent strategic advantages and remedies. You may have to:
Pay actual damages. A photographer or stock agency may elect to recover the profits you made from the unauthorized use or the profits they lost because of your failure to take and pay for a license.
Pay statutory damages. In lieu of actual damages, a photographer or stock agency may elect to ask the court for an award of statutory damages of up to $30,000 per work infringed where the infringement was not willful and up to $150,000 per work infringed in cases of willful infringement.
Pay the other side’s attorneys’ fees and costs. On top of actual or statutory damages, a photographer or stock agency may ask the court to award reimbursement of their attorneys’ fees and costs (which can be quite substantial—a lawyers’ professional association reports that in 2010 the national average cost to try a small copyright infringement case was $350,000).
Obey an injunction. Plaintiffs may also ask the court to provide injunctive relief by ordering you to stop the infringing use and to surrender all infringing inventory and reproductive materials for destruction.
Undergo a takedown. If your infringement is online, the photographer or stock agency may serve a takedown demand on your service provider, which will likely result in some or all of your Web site being disabled.
Bear indemnification obligations. Since copyright infringement is a “no-fault” offense that reaches virtually every party who participates in the reproduction, distribution, adaptation, or public display of an infringing work, your printer and/or your ISP may be named as additional defendants, increasing your cost and exposure. (See “Printers’ Terms: What the Boilerplate Means and Where There’s Wiggle Room,” in the March 2011 Independent.)
It’s said that you get what you pay for. When it comes to photography, that doesn’t necessarily mean that low price equals low quality. Instead, a low price for reproducing a photograph probably means sharply limited rights. So look for a good price, but focus hard on the license terms, and make certain they cover what you need to avoid ending up in a damaging fight over photos.
Steve Gillen is a lawyer and partner in the intellectual property firm of Wood Herron & Evans and has focused his practice on publishing and media matters for 30 years. He is a member of IBPA and a frequent contributor to the Independent.