The company X (“Advertiser”) requests its Advertising Company (“Agency”), with whom it has worked with for a number of years (without a written contract), to produce promotional documents, involving, notably, photographs.
After validating the brief with the Advertiser, the Agency is responsible, inter alia, for coordinating and implementing the entirety of the “photo shoot” necessary to achieve the required results (identification of the shooting location, choice of models, selection of the photographer, purchasing of art, negotiation of rights, etc.).
Once the project has been carried out in a proper and timely manner, the Agency submits its invoice to the Advertiser, mentioning the following elements:
The Advertiser pays the invoice and begins to exploit the promotional documents in accordance with the provisions agreed upon with the Agency.
A year after the Advertiser began utilising the photos in its advertising campaigns the Agency had encountered financial difficulties which quickly led to judicial redress.
In spite of the previous payment made by the Advertiser to the Agency eighteen months earlier, it is in within this context that the Photographer (who had never been paid by the Agency), directly contacted the Advertiser requesting payment for the full amounts owed for the work he carried out (including the fees for the time spent producing the photographs and those resulting from the granting of copyright).
The Photographer claims that the Advertiser’s use of his photos (without payment) constitutes “copyright infringement” and that without an immediate payment (including the actual amounts due as well as an additional compensation payment), he shall request, from the competent courts the banning on the dissemination of promotional tools utilising his photographs without further delay (such court application would, of course, contain many other requests , notably financial ones).
It is in this light, to limits liabilities (a year of utilisation by the Advertiser without paying the Photographer), continue with future advertising campaigns (for two additional years) and comply with the Photographer’s rights and interests that the Advertiser therefore had to pay for a second time, the total amount owed by the Agency to the Photographer…
If you think you are immune to this situation -without any doubt, a case of exception – do not be fooled! … similar problems are quite likely to arise in the event of a default by one of your providers (non-payment or partial payment of their sub-contractors, without them necessarily encountering judicial redress).
This case, of course applies to all tasks subcontracted by your service providers vis à vis third parties (i.e. designers, stylists, photographers, graphic designers, developers, sound engineers, etc., – list not exhaustive).
While the popular saying “If wishes were horses, beggars would ride” applies here, however despicable that may sound , the fact remains that the Advertiser (although it never imagined that one of its most faithful service providers would encounter such difficulties and fail to comply with its obligations) could have better regulated the relations with its Agency and any subcontractors thereof. This would have helped minimize the impact of the encountered difficulties.
Thus, in the future, the Advertiser shall insist that) its Agency (and other providers) that a specific reference (for the amount allocated to the licensing rights) be mentioned in the agreements, purchase orders and other invoices.
Moreover, the Advertiser shall request that this same reference appear on the agreements, purchase orders and other invoices issued by its Agency to the former.
The French expression “un homme averti en vaut deux” (“Forewarned is forearmed”): means that being aware of a potential risk places you in a favourable situation, enabling you to face confusing, frustrating, disparaging , dangerous and/or financially scandalous situations.
