One Opinion to Remind Us

A very recent opinion in the Eastern District of Pennsylvania (Kashi v McGraw Hill Global Educationpdf here) looks at first like the photographer plaintiff lost because the court did not grant him summary judgment. However, really, the opinion has lots of good stuff for photographers/licensors in general, and maybe even the plaintiff. I’m going to discuss the highpoints below (out of order from the opinion, by the way).

First, there is the part about registration where the court followed the reasoning in Alaska Stock (etc.) that roughly says that when a person registers a collection of works and follows the steps prescribed by the US Copyright Office, then the registration conveys to the individual works in the collection. Yay!

Then, there is the part about how there can’t be an implied license if there is an express one. Implied licenses are sneaky–sort of accidental licenses that exist because of conduct–and can bite photographers (and other licensors) in the butt. However,  if you have a written license for the same work for the same client, then that client can’t later go beyond the license and try to say that there was an implied license at work. Yay!

Relatedly, the court reminded all that a defendant can’t rely on “industry custom” to excuse its bad behavior when it comes to copyright matters. However, a defendant could point to previously agreed to behavior by the actual parties as an out, but that is different. So, yay again.

Next, the court said that there may be an issue about the statute of limitations in this particular case, even though the discovery rule applies. This is important: you’ll hear people say “you have three years from the date you discovered an infringement to bring a suit” but generally attorneys will add the important “or the date you should have discovered it” into that sentence. As the court here pointed out, you can’t turn a blind eye to possible infringement then, later, say you didn’t find the infringement until much later. If you have reason to think there might be infringement happening–that is, a specific act of infringement (not just “I bet someone somewhere is knocking off my work”)–then you need to investigate. The clock essentially starts when you have good reason to suspect there is an actual infringement happening in that situation. No yay–more of a heads-up.

And finally, the big issue here was whether a use beyond the scope of a license meant there was a condition precedent or a covenant breached, which is legalese for “is this a copyright infringement matter or a contract matter?” Here, the court said payment for the specific rights was a condition precedent  to the grant of those rights so this was an infringement case.

So what’s the big deal? A contract can only get contract damages, which are usually very limited. An infringement with a timely registered work gets statutory damages and maybe attorneys’ fees–much more. But the two things are very close cousins, language-wise.

A covenant is a promise and an exchange of promises is a contract; so if Party 1 promises to do X and Party 2 promises to do Z in consideration of X, then you have a contract; if one or the other isn’t done, you can only sue on the contract. For example, “PhotoBob agrees to license the works to Client for $1000, which Client agrees to pay within 30 days” is a contract. If Client doesn’t pay on time, PhotoBob can only sue for the amount of the contract–to get paid what he is owed. Usually, you can’t get attorneys’ fees paid for if you sue for breach of contract (there are exceptions, depending on state law, but generally require that the contract specifically includes language about getting attorneys’ fees if you sue and win on the contract).

A condition precedent, on the other hand, is a condition that must be fulfilled before a duty to perform a promise in an agreement even comes into being. For example, “rights will be granted only on condition of receipt of full and timely payment” means no rights are granted unless the other side pays up in full and in time. That payment must happen first, like a trigger, that then makes the photographer grant the rights agreed to. Late payment means no rights granted means if the client has used the work, it has infringed.

So, in this one opinion, we get a bunch of reminders that photographers (and anyone making creative work and licensing it to others) need to do specific things to make sure they’re covered for all these situations, but if they do things properly, then the law is on their side:

  • Use written licenses.
  • Have language in your contracts and invoices that make it clear that payment is a condition precedent (ask a lawyer!).
  • Register your works properly (and in a timely manner).
  • Don’t be willfully blind to potential infringements then try too late to go after them.

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