Over the course of two months we advised two artists on similar copyright issues relating to works they had been commissioned to create. What unfolded was a tale that had a very different ending for each artist. In this article we explore licensing copyright and the importance of clearly articulating exactly what it is you’re permitting your artwork to be used for.
In both cases, the artists were commissioned by large organisations to create a design and a piece of art. The first artist was briefed to create a piece of art for use on material for a specific event in 2012. The second artist’s brief was to create a piece of art for the organisation’s reception and for use on the cover of selected internal educational material.
Both artists came to see us for advice after they noticed their artwork being used in mediums they did not expect and in a way that provided commercial benefit for the commissioning organisation. The first artist noticed his design was being used on stickers, brochures, signs and in advertising material. The second artist discovered that the organisation was having her design reproduced on a large brick wall of their car park.
Both artists had written contracts in place for their commissioned work. As far as both artists were concerned, they created their designs for a specific use and the organisations concerned had misused their artwork and breached their contracts.
Plot line #1: Assigning v selling copyright
Copyright protects artists’ literary, dramatic, musical and artistic works. Some of the works protected under copyright law may include paintings, drawings, screenplays, sound recordings, novels or even computer programs.
Copyright protection ensures that no one can use or display your work. Under section 36 (1) and 101 (1) of the Copyright Act 1968 (Cth), a licence or express permission must be obtained from the owner of the Copyright work, namely the artist, before the work can be used in any way otherwise it is an infringement.
There is no question here that our two artists owned the copyright to their art and design and had the right to sell or licence it. In both cases the artist had agreed to licence (as opposed to sell or assign) their artwork. What we needed to determine was whether or not they had agreed to license their artwork for a specific or limited purpose and whether in fact the contract had been breached by the licensee.
Plotline #2: The licence agreement
If licensing your copyrighted work, like our artists you should have a contract in place (often referred to as a ‘licence agreement’. That contract should preferably be a formal document and at the very least must be in written form such as a Terms and Conditions document, a letter or even a statement made on a quote when pricing the transaction. In reality many contracts for artwork are formed by the quote and/or a letter or proposal.
Any contract must include a clause along the lines of this: “the artist shall remain the sole owner of the copyright in the Artwork.”
When licensing your copyright (i.e. you are not selling or assigning it), it is important that the contract details specifically what the design is to be used for, how long it is to be used for, in what formats and that you retain ownership of the design.
With that in mind, consider this clause which was in our first artist’s contract:
“Copyright in the Artwork and design remains with the Artist and any printing must attribute copyright to the Artist. Under this licence agreement, upon payment of the fee, the company may use the design for the use on sponsors T-Shirts, programs, tickets and advertising material for the event on 3 October 2012.”
This clause makes it very clear that the ‘buyer’ of this license would be breaching copyright should they seek to use the design after 3 October 2012.
Now, consider the following clause which was contained in our second artist’s contract – also a licensing contract:
“Title to the Artwork and all Intellectual property rights in Artwork will vest in the Artist. Upon payment for the Artwork the company is granted a permanent, irrevocable, royalty-free, exclusive licence, to use, exploit, reproduce, adapt, sublicense the intellectual property rights in the Artwork for any purpose.”
This clause allows the company to use the art for pretty much any purpose they want and to sell the design. As you can see, the ramifications of these two clauses – although both in relation to licensing - are vastly different.
After corresponding with each of the organisations involved, we managed to negotiate a further substantial fee for the first artist as the organisation was in breach of the contract.
For the second artist, she was not paid for the additional uses of her design but the organisation agreed not to use the design other than in its original style.
In both cases the organisations are now attributing copyright to the artists on all reproductions of the designs – an obligation that was in both contracts which the organisations “forgot” to do.
The moral of the story
Make sure before signing a written contract, you understand exactly how, when and what you want your design is to be used for. The fact that you are licensing, not selling your work, will not protect you from your artwork being used for other purposes unless specifically stipulated in your contract.
Do not rely on a conversation and a handshake. Be in control of your contract by creating and sending it to the licensee where possible. If you receive a contract, make sure that you understand the scope of what your artwork is to be used for.
A legal footnote
We have changed the facts above for confidentiality reasons. The issues dealt with in our advice to the two artists went well beyond the clauses in relation to licensing. One such issue for both artists dealt with moral rights; both artworks were reproduced and adapted in a way that effectively changed the meaning of the designs and their integrity.
When advising artists on copyright, we generally caution against selling or assigning copyright unless there is a considerable financial benefit involved.
Recently a customer of ours was introduced to the world of competing interests in online real estate. In short, the customer had registered a trademark in the name of a service it provided, but its competitor registered the exact same name as its domain name. To make matters worse, the name was synonymous with a specific type of service offered in what is considered a very specialised industry. Consequently, online traffic destined for the trademarked customer's company was redirected to the competitor.
This is by no means a novel issue, but it is a growing one. A company’s website is the first port of call for customers looking to gain immediate access to its business, and vice versa. Unfortunately, there remains a lack of understanding among business owners on the importance of the rights and the protections associated with trademarks and domain name registration.
This article will offer some perspective to business owners on the legal implications that can flow from these sorts of issues.
Trademark v domain name
Naturally our customer’s first question was, “Can they do this?” In short, no.
Registering a domain name does not give you proprietary rights to the name. A party that registers a domain name does not own the name but holds a licence to use it for a specified period, subject to terms and conditions. The licence may be revoked by the domain name regulatory body (auDA) in instances of trademark infringement (see Remedies for Infringement below.)
All that is required to register a ‘.com.au’ and/or ‘.net.au’ domain is that it must exactly match or be an acronym or abbreviation of the registrant's company or trading name, trademark, or otherwise be closely and substantially connected to the registrant.
A trademark is defined as:
"a sign used, or intended to be used, to distinguish goods or services provided in the course of trade by a person from goods or services provided by any other person".
The owner of a registered trademark has the exclusive right to use and authorise the use of the trademark in relation to the goods and services for which the trademark was registered.
A registered trademark is a perpetual right which may be sold to or licensed for use to other parties. Following the payment of the registration fee a trademark may be renewed every 10 years, indefinitely.
The only way to claim ownership of a domain name is to have it trademarked. If the owner’s rights are infringed, then they generally have a right to have a third party remedy the infringement or seek compensation for the loss and damage caused by the infringement.
Remedies for infringement
The auDA: .au Domain Administration Ltd, is the policy authority and industry self-regulatory body for the .au domain space.
The auDA offers a Dispute Resolution Procedure (auDRP) that brand owners can use when their brands, marks and IP are registered by unauthorised third parties.
The purpose of the auDRP is to provide a cheaper, speedier alternative to litigation for the resolution of disputes between the registrant of a ‘.au’ domain name and a party with competing rights in the domain name.
The dispute is handled by an independent provider (the Provider) of dispute resolution services that is approved by the auDA.
Brief outline of the process:
In Australia, some intellectual property rights can exist without registration, such as copyright and unregistered trademarks which have acquired a reputation. In these cases, there are two areas of protection.The first – common law – gives protection to those with a claim to unregistered trademark rights.
The act of ‘passing off’ protects the goodwill or reputation developed from the use of the unregistered trademark by the first trader, where another trader's conduct misleads or confuses a significant number of consumers.
An unregistered trademark does not provide any property rights in the trademark itself. The most common remedy for passing off actions is an injunction ordering the other trader to stop using the trademark and/or damages.
The second area of protection is Misleading and Deceptive Conduct, which prohibits a corporation from engaging in conduct that is misleading or deceptive, or likely to mislead or deceive. The remedy for Misleading and Deceptive Conduct is typically damages.
It is important to note that not every instance of trademark infringement is malicious and can occur by coincidence. More often than not a letter outlining your claim as the trademark owner to the alleged infringer proves to be the most efficient and cost-effective solution - as proved to be the case with our customer.
Nevertheless there will be instances where an apology and the removal of the domain name will not repair the financial damage caused.