An Insight: Assignment and Moral Right

Mannu Bhandari v. Kala Vikas Pictures Pvt. Ltd. and Anr.

1987 (7) PTC 87 (DEL)

Facts:

Mannu Bhandari, the Plaintiff/Appellant, was an author of great repute in Hindi Literature. She entered into a contract with the Defendants/Respondents for the assignment of the rights in her novel ‘Aap Ka Bunty’ for its production into a film.

The Respondents produced the film ‘Samay Ki Dhara’ based on the aforesaid novel.

However, the Appellant claimed that the Respondents have distorted and mutilated her novel for commercial gain.

The Appellant moved the Court of Additional District Judge, Delhi pleading for a decree of permanent injunction on the screening and exhibition of the film on the grounds that the Respondents have breached the contract of assignment and have violated her rights under Section 57 of the Copyright Act, 1957.

Appellant primarily objected to (i) the title ‘Samay Ki Dhara’ and prayed for a direction to amend the film’s title, (ii) the change in the exhibition of certain characters of the novel, and (iii) the mutilation of the theme by use of vulgar dialogues.

The trial/district court refused the relief of ad-interim restraint order to the Appellant. Hence, the appeal was filed by the Appellant in the High Court of Delhi.

Before the pronouncement of the judgment by the High Court of Delhi, the parties reached a settlement that the Respondents would delete the Appellant’s name and the name of her novel from the credits, and in return, the Appellant shall not claim any rights whatsoever in the film ‘Samay Ki Dhara’. But the parties requested the Court to pronounce the judgment as there were no decisions by a Court of law on this issue. Therefore, it turned out to be the first case on the interpretation of s.57 of the Copyright Act, 1957.

Arguments on behalf of the Appellant:

Novel of the Appellant, ‘Aap Ka Bunty’ is recognised by the public both nationally and internationally for its script, theme, dialogue, substance and the central idea. If a distorted version of her novel is allowed to be presented through the film, her admirers would conclude that she has fallen prey to big money and consented to mutilations and distortions of her novel and doubt her sincerity and commitment.

Arguments on behalf of the Respondents:

By signing the contract of assignment, and receiving the full amount in consideration for assignment of rights, the Appellant had agreed to the modifications. Therefore, the Appellant cannot object to the modifications after the movie has been produced.

In case of a literary reproduction of the novel with impermissible changes, the publisher can be restrained. However, if a film is produced based on the novel, no restraint order can be passed.

Judgment and Observations made by the Court:

On Respondents’ objection that the acceptance of the total consideration for the assignment disqualifies the Appellant from holding any rights in the work, the Court held that the wording of Section 57, viz. ‘even after the assignment’ dismisses such a contention. Assignment means the passing of the title on payment of consideration, and the legislators have made it clear through the words used, that the special rights of the author can be exercised even after an assignment.

The basic question before the Court was how to balance the author’s freedom of expression with that of the director in the field of art. The Court agreed with the trial Court to as much that some changes are inevitable when a novel is being converted into a motion picture, but held that such changes or modifications should not convert the work into an entirely new version of the original work. The modifications should not distort or mutilate the original novel. The main theme, the situations and the main characters of the novel must be untouched.

To answer the question, the Court interpreted the scope of Section 57 of the Copyright Act, 1957 and held that the section gives special rights to the author beyond the material gains of copyright. These rights are independent of the author’s copyright and the remedies open to the author under Section 55.

The fact that remedies can be claimed even after an assignment has been made, highlights the special protection of the intellectual property. Thus, Section 57 has an overriding effect over the terms of the contract of assignment of a copyright. Hence, the contract of assignment between the parties must be read subject to the rights given to an author under Section 57. A contract cannot negate the special rights and remedies available to an author under the section. The right of the Appellant/assignor to seek a remedy under the section does not stand waived by the assignment.

Though the appeal was disposed off in the terms of the settlement, the observations and directions of the Hon’ble Court provide a guiding light towards interpretation of Section 57 of the Copyright Act, 1957.

IP in Apps

Mobile application (App) development is progressively becoming one of the largest and quickest revenue generators for small and start-up technology companies. A new report from Marks and Markets pegs the mobile App revenue growth at $25 billion by 2015 (up from approx. $6.8 billion in 2010). It is estimated that about 50 million Apps will be downloaded by 2012.

However, given the recent spate of lawsuits and consumer complaints, legal protection and compliance are becoming ever more important issues for mobile application development companies. Though the laws governing Apps vary widely depending upon the consumer base, nature of content, and the business model utilized for developing the App, it is important to consider at least the following aspects of App development and marketing:

Intellectual Property Right (IPR) in the App Software

The IPR in the App software is a copyright that its author enjoys the moment he or she writes the code. The ownership of such copyright might be complicated if the App development has been outsourced to a vendor, achieved through a joint effort, or derived from an open source software (OSS). Where all or part of the development of the App has been outsourced, the vendor agreement should ensure that the party financing the App development has acquired all IPRs to the software through a properly drafted “work for hire” clause. In addition, it is important to bind the vendor with a non-disclosure agreement to ensure strict confidentiality while your App is being developed.

When an App is developed through a partnership, each company owns the IPR only over the piece developed by it, in the absence of an agreement to the contrary. If each party involved in the development wants the ability to further exploit the App for commercial and non-commercial purposes, then the parties should execute an agreement of joint ownership of the App wherein which each party will be required to account to the other of the financial benefit derived from its use of the App.

A number of Apps today use open source software (according to a recent survey by Open Source, OSS is used in 88% of the Android phones and 41%of the IOS phones). IPR and end user licensing require special consideration in these Apps because the OSS licenses (GPL, LGPL, or Apache) have specific requirements for attribution, distribution, and non-discrimination with respect to the platform. Further, a single app might be developed using a combination of OSSs, each governed by a different license. A legally compliant launch of such an App requires (i) identifying the different components on the App software, the OSS license they are based on, and the compliance requirements for each license, (ii) drafting a terms of use statement that complies with all the required OSS license requirements, and (iii) identifying those components of the App software over which the developer can exert an exclusive IPR.

Intellectual Property Right in the Content

The App might use (i.e. display, reproduce, publish, modify, or make a derivative work of, etc.) copyrighted content such as images, videos, and sound recordings of others. Developers need to procure “rights clearance” from copyright owners in order to be protected against infringement claims. Clearance may exist for certain uses, such as in-store, but it is important to receive permission for use where such rights have not already been licensed.

Trademark issues might also arise if the App or its features are similar to a prior registered or otherwise recognized trademark. Trademark is a branding tool, and so the true test of infringement is whether the use of another’s trademark confuses the end user regarding the origin of the App. Thus, an App could infringe another trademark in a number of ways, including (i) if the name of the App is similar to an existing trademark, (ii) if the look, feel, and layout of you App is similar to that of a recognized mark, or (iii) if an existing trademark is used in the marketing or description of the App such that the end user is likely to be confused as to the source of the App. In order to avoid trademark infringement issues, the developer should identify the use of any prior trademarks in the App and inform the end user that the App is not sourced or endorsed by that trademark owner.

If the App allows for user contribution, then it is important to protect against vicarious liability from users who post infringing content. The Digital Millennium Copyright Act might help avoid such liability if the developer follows the requirements of its safe harbor clause, including (i) immediately removing the infringing material when a complaint is received or the App owner becomes aware of it, (ii) disabling repeat infringers from using the App, (iii) not receiving any direct financial benefit from the infringing activity, and (iv) adopting reasonable technical measures to avoid infringement.

Privacy and Data Collection Issues

As is evident from recent lawsuits against Apple for breach of privacy, data storage and privacy are becoming real concerns for end users. In Apple’s case specifically, the problem was that it was storing location based data of end users in an unencrypted form and using it for commercial purposes .While a monetary damage still needs to be established, failure to address end user’s privacy concerns could negatively impact the App’s consumer support and sale.

These concerns regarding privacy and data protection can be addressed by drafting effective terms of use and privacy policy statements that are reflective of the developer’s consumer base and privacy practices. The terms of use and privacy statements should at a minimum include, (i) what information is collected, (ii) how is it stored (iii) how is it used by the developer (iv) whether the information is shared with third parties, (v) how can the user opt out providing such information, and (vi) contact information for end user complaints of the user data. If the App does collect and share personal information, then the developer should get consent from the end user for doing so.

Your Image…My Brand Image

                               (Image used for Non-Profit Editorial Only)

The identity of an individual refers not only to his photographs or physical appearance but to all distinct, recognizable element which make up a particular persona, image or likeness, name, voice, signature, style, gestures, recognizable attire, look and facial features. A public persona generates an enormously lucrative and instant brand recognition among the masses.

A celebrity under Indian Laws and as well as under major legal regimes enjoys what are known as rights of publicity or image rights which enable them to commercially exploit the goodwill associated with their star and/or celebrity status.

There are several ways in which the image of a celebrity can be used in advertising. The most obvious manner is tools of the trade& endorsements of products that are closely related to a celebrity’s field of activity. For instance, sportsmen routinely endorse sports equipment or clothing. Another is non-tools Endorsements where a celebrity’s image is used in connection with goods or services that are completely unrelated to his field of activity, for instance a film star endorsing a bank or a telecommunications company.

Need to protect Celebrity Rights:

The right to publicity is inheritable. Therefore descendants of celebrity can gain from the popularity created by celebrity during his/her lifetime.

Celebrity Rights are assignable &licensable for commercial benefits. In the present times publicity involves immense amount of money& the public image of a celebrity is of tremendous value. Thus, this creates an economic incentive of the public & celebrities are adequately rewarded due to their moral claim over money arising out of their name and fame.

Violation of Publicity Rights:

Use of a person’s persona for commercial gain in an unauthorized manner amounts to violation of publicity rights of the person. Any person must therefore take permission of a celebrity for using his persona for commercial gain.  The unauthorized use of a celebrity’s personality can be call for an action of passing off, of unfair competition, of misrepresentation and can cause damage to their reputation. It can also amount to a breach of confidence or a violation of privacy, both duly accepted under present Indian regime.

The right of publicity encompasses the right to initiate action to prevent   the wrongful appropriation of an individual’s identity for commercial purposes without his or her consent; or seek compensation.

Intellectual Property Protection in India:

• The Supreme Court of India in R.R. RajaGopal v. State of Tamil Nadu, (JT 1994 (6) SC 514) recognized right of publicity in the form of right of privacy as follows: “the first aspect of this right must be said to have been violated where, for example, a person’s name or likeness is used, without his consent, for advertising – or non-advertising – purposes or for any other matter”.

• Delhi High Court in ICC Development (International) Ltd. v. Arvee Enterprises, (2003 (26) PTC 245 Del) held that the right of publicity does not extend to events and is confined to persons.

Under Trademarks Act individuals may apply for the protection of their name, likeness among other things, with the Indian Trademarks Registry in order to obtain statutory protection against misuse. This is of strategic importance for celebrities who intend to use their image and likeness to identify their own or an authorized line of merchandise. Few of the pertinent cases are discussed below:

• In DM Entertainment v Jhaveri (Case 1147/2001), Daler Mehndi, a famous Indian composer and performer, brought an action against the defendant following the registration of the domain name ‘dalermehndi.net’. The Delhi High Court restrained the defendant from using the trademark DALER MEHNDI, thus recognizing the fact that an entertainer’s name may have trademark significance.

• Another case involving an Indian citizen was that of Ratan Tata, the chairman of Tata  lodged a complaint in Word Intellectual Property Organization (WIPO) arbitration panel seeking the transfer of domain names comprising the name Tata (Tata Sons Ltd v Ramadasoft (Case D2000-1713, February 8 2001)).

 

• Sourav Ganguly v. Tata Tea ltd., Sourav Ganguly, a hugely popular cricketer and former Indian captain, who returned from a tour of England to find a well-known brand of tea cashing in on his success by offering consumers a chance to congratulate the cricketer. The offer implied that the cricketer had associated himself with the promotion, which was not the case. Ultimately, Sourav Ganguly   could successfully challenge it in the Court before settling the dispute amicably.

In a different but pertinent case, In 2009 Montblanc released luxury pens in India called “Mahatma Gandhi Limited Edition 241” and “Mahatma Gandhi Limited Edition 3000”, which were engraved with Mahatma Gandhi’s portrait on the nib. Tushar Gandhi (Gandhi’s great-grandson) had given his prior approval; however, the launch was met with immediate opposition on account of the Protection under the Emblems and Names (Prevention of improper use) Act 1950. Under this act, unless the government permits it, names and images of nationally important personalities cannot be used for any trade, business or professional purpose. As a result, Montblanc was forced to withdraw its advertisements and the pens in question from the market.

The Indian copyright Act, 1957 does not define the word “celebrity”. But reference can be made to the definition of a performer as given under section 2(qq). The performer includes an actor, singer, musician, dancer, acrobat, juggler, snake charmer, a person delivering a lecture or any other person who makes a performance. There is not much clarity as to what aspects of celebrity rights may be protected under Copyright Law.

The Indian Copyright Act, 1957 provides protection of  specific image in the form of a photograph, painting or other derivative works. To pursue an action of infringement individual must show ownership of copyright in the image or photograph and copying of that image.  In the context of celebrities, it becomes difficult for them to show their ownership  of  their specific image or photograph being exploited.

• In Titan Industries Limited v Ramkumar Jewellers ([CS(OS) 2662 of 2011]), the plaintiff had asked celebrity couple Amitabh Bachchan and Jaya Bachchan to endorse and advertise its range of diamond jewellery sold under the brand name Tanishq. The couple had assigned all the rights in their personality to the plaintiff to be used in advertisements in all media, including print and video. The plaintiff had invested huge sums of money in the promotional campaign. The defendant, a jeweler dealing in identical goods to those of the plaintiff, was found to have put up a hoarding identical to the plaintiff’s, including the same photograph of the celebrity couple displayed on the plaintiff’s hoarding.Since the defendant had neither sought permission from the couple to use their photograph, nor beenauthorized to do so by the plaintiff, the court held it liable not only for infringement of the plaintiff’s copyright in the advertisement, but also for misappropriation of the couple’s personality rights. The court thereby granted an interim injunction in favour of the plaintiff while specifically recognizing the couple’s rights in their personalities.

• Phoolan devi Vs  Shekar Kapoor & others, Phoolan Devi herself protested that the film has distorted the facts .She sought an injunction as she had given up her past criminal activities & had started her life afresh. The court held that issue need to be thoroughly examined and the implications of such exhibition on the private life of an individual be scrutinized before permitting release of such films. Thus, a celebrity can protect his /her name & image as a constitutional right.

Remedies:

Passing Off Action is a remedy to damages to reputation and goodwill of an individual caused by misrepresentation by another person trying to pass off his goods or business as goods or business of another .An action in passing off  may lie for any  unauthorized exploitation of celebrity’s goodwill or fame by falsely indicating  endorsement of products by the celebrity.

An action for passing off requires proof of:

• the reputation of the individual;
• some form of misrepresentation;
• irreparable damage to the individual.

In Henderson Vs Radio Corporation the claimants were professional ballroom dancers .The defendants produced a record “strictly for dance” in which they used a picture of the claimants in the cover illustration. The claimants argued that this amounted  to  “Passing Off “.The court held it as wrongful appropriation of personality and professional reputation of plaintiff’s.

Provisions in International Conventions:

Few landmark conventions in  regards  to protection of performer’s rights  are The International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations,(1961)Rome Convention, TRIPS & The WIPO Performances and Phonograms Treaty 1996  (WPPT) .

Conclusion:

The protection of publicity and image right is expanding in a celebrity obsessed culture of India. Recent cases where legendary Bollywood actor Amitabh Bachchan  spoke out against the unauthorized use of a sound-alike of his distinctive deep baritone in an advertisement promoting a brand of gutka (chewing tobacco), an association which was detrimental to his image and of the famous Indian actor Rajnikanth ,published a legal notice in various magazines before the release of his latest film prohibiting anyone from  damaging  his screen persona or from using his character in the film for any financial gain including advertisements  ,and impressions by comedians ,clearly suggests  that  Right of publicity has emerged as an individual class of IP protection.

While Indian celebrities have intermittently attempted to protect their personality rights, the law on this aspect has taken a long time to develop.

My Brand…Your Image ???

If you have a fashion website and/or apparel business, I find it makes a huge positive impact on sales to show celebrities wearing the same sort of item you’re selling or offering on your websites.

So, what about using celebrity images on the E-commerce website? If you don’t have the opportunity to shoot the images yourself, is it possible to use celebrity images without violating any copyrights? This article introduces the legality of using images you find on the internet.

Always Get Permission to Use the Image

Unless you’ve taken the image yourself, regardless of where you find it, it’s usually owned by someone else. It’s fine to use images owned by another party as long as you receive written permission from that person/entity to use their image.

Send an email to the contact person at the web site whose image you would like to use. After they respond in a positive fashion, including the photographer’s permission, they’ll usually send you high-res images or state they give their permission for you to download the image from their web site to your desktop.

The owner will usually tell you how to attribute ownership. If not, a good attribution is ©photographer’s name / Web site name.

Editorial versus Commercial Use of Images

Editorial use of images means you want to use the image to accompany a story you’ve written on a topic of general interest. For example, you write a story about the latest trend in celebrity handbags and you want to use an image of Kareena Kapoor holding the handbag. Generally, no model release is required for editorial use; however this is always something to clarify with the owner prior to using the image.

Using an image on any website that generates revenue, advertises products or services is commercial. E-commerce, of course, falls in to that definition. So use of a celebrity image on your Ecommerce website in conjunction with selling your product is held to a much higher standard than editorial use.

Here is an example of image owner use restrictions:

Contact xxx@the photo images service you want to use.com for all commercial or promotional uses.

Getting Commercial Use Permission

There are free images sharing sites on the internet such as Shutter, Getty, Flickr and Google Images from which you can access a wide variety of images (although celebrity images are very hard to find). Make sure that any image you use for your web site is approved by the owner for commercial use.

Some owners won’t let their image be used at all commercially, others will charge a fee or ask that you provide a link back to their web page.

Model’s Release

Another dicey issue is getting a model’s release. Just because someone has his or her picture taken doesn’t necessary mean you can use it without a release. Generally, celebrity images don’t need a model release for editorial use.

Altering the Image

Some owners allow you to crop or re-touch the image, others don’t. Most owners will make this type of information abundantly clear.

Find Out More Information Before You Post Images

When in doubt, always check it out. It’s better to make sure you have permission to use an image on your E commerce website than get an advocate’s email with a cease-and-desist order, requesting damages for the use of the image.

NOTICE…

Your employment contract is probably the most important contract that you need to understand. At the time of joining, you might see in the contract you sign: THE TERMINATION CLAUSE. It’s something you don’t really want to think about when you’re all excited about a new job offer, but it’s almost always in there. You’re most likely to see something like this, in your contract or offer letter: You agree and understand that your employment is at-will. Your eyes probably glazed over and you didn’t think about this. But the next time you are handed a contract to sign that says this, I suggest you think about it seriously. What this means is that you agree you can be terminated for any reason or no reason at all. If your new boss is in a bad mood a fortnight after you start, you’re out of there with no severance at all. I suggest you try to negotiate a better clause than this one. A slightly more acceptable clause: You agree that the Company may terminate your employment by giving 90 days’ notice. If the termination is for cause, the Company may terminate your employment without notice. At least in this one, the company has to give you some notice, or pay out the notice period as severance. The clause might have more or less notice, depending on what you negotiated, but the notice is important. It’s also important to define what “cause” for termination will be. If you leave it up to the company to determine whether or not your performance is up to par with no way to measure, then you might as well be at-will. What’s concerning about a clause like this one is sometimes people spend lots of time negotiating the length of the agreement.

Say you negotiate a contract with a one year term, with automatic renewals at the end. You think you’ve assured you have something steady for at least a year. But this clause completely negates that one year. Whatever notice the company puts in here that they have to give, that’s likely how much they’ll have to pay out. Even better would be: This agreement may only be terminated for cause. In the event of termination for cause, the company shall give notice of the alleged cause and give you 30 days to cure the problem before termination. You still need to worry about defining what constitutes cause, but with this clause you have a chance to fix things if the company thinks you’re messing up.

If they fire you for no cause, they have to pay out the rest of the contract. That’s great if you have lots of time left on it, but if you don’t, you might have been better off with the provision above. Still, if I have my druthers, I’ll pick this one over that. At least you’ll have time to prove yourself, so your move won’t be a complete hardship. If you have lots of leverage, or if the employer wants you bad enough, you might get lucky and get a clause like this: In the event of termination, the company will pay you 6 months of severance. Notice it says nothing about cause or no cause. With this one, it doesn’t matter how much you mess up. As long as you haven’t breached the contract in some way, the employer has to pay out your severance no matter the reason for termination. This kind of clause is especially good if you have a noncompete.

If you have to stay out of the industry 6 months, they should pay you 6 months so you can survive. If they want you to stay out longer, you should try to negotiate a longer payout. Even though you don’t want to think about getting fired or laid off, you have to if you want to survive in this economy. If you have any leverage at all to negotiate a better contract, the termination clause is one of the most important clauses to get right.

NDA

‘Shall I sign…shall I not!’

What is an NDA?

A non-disclosure agreement (NDA) is a signed formal agreement in which one party agrees to give second party confidential information about its business or products and the second party agrees not to share this information with anyone else for a specified period of time. Non-disclosure agreements are common in multitude of companies where products are sometimes jointly developed. An NDA is also sometimes used when a company seeks venture capital from potential financial backers as a way to make sure that proprietary secrets or ideas are not stolen or leaked to someone else by the prospective investors.

Protecting your Intellectual Property

There are several ways to protect your intellectual property (IP). Protecting your IP should can be done using Patents, Trade Marks and other legal ways that do not reveal the most important parts of your venture such as any concepts, scripts, sketches, layouts, concept, manuscripts, reports, data, know-how, works-in-progress, designs, development tools, specifications, computer software, source code, object code, flow charts, databases, inventions, information and trade secrets to anyone who does not need to know it in order to evaluate your venture or help you achieve something. Protecting your IP is also important for small start-ups, as revealing the most important secrets should be done only within a very close circle of employees.

Why People Don’t like to sign NDA’s

Most entrepreneurs will not agree to sign an NDA. Because these people meet so many entrepreneurs and see so many ideas from across several industries, the chance that they have seen something similar to your idea before or have heard something about it before is really high. Even in those exceptional cases where your idea is so unique that it is the first time they’ve heard about it, this does not mean that the next person coming to meet with them will not have a similar idea.

As evolution is one of the strongest forces that govern our societies, often new ideas evolve only within the right climate or perhaps when there is a gap in the marketplace that it can uniquely fill. As Thomas Hobbes said, “Need is the mother of all invention”. Hence, it could be that your idea, although new and somewhat original, is already in the process of being developed by others. This is not as rare of a circumstance as one might think; since it is very likely that what you may have noticed missing from the market is also being notices by many others at the same time.

When and how to use an NDA

If you are going to ask someone to sign an NDA, make sure that he or she is about to be part of a very small group of people that are allowed to probe into your confidential informations, unregistered Intellectual Property (s) or, in case of non-technical startups, your formulas.

If you are going to have working relationships with an employee or service providers, during such relations you would like to protect yourself, this is when you should have an NDA signed.

The NDA should be specific to the extent that it explains in detail what you are protecting and what should not be disclosed. An NDA in many cases should be about mutual safeguards and protections for the other party as well. Bringing the other party to a place where they feel comfortable with the legal document you are asking them to sign makes it more likely for them to treat it with respect.

Summary

Hence, NDA’s may serve your best interests. But for more protection for your IP, it is better that you use patents and trademarks, and most importantly, don’t show the most secret parts of your venture to people. Only show the few people to whom you must explain it to in order to get their attention and feedback.

Who Owns…Who Hires!

 

The Copyright Act’s “work made for hire” doctrine is the major exception to the fundamental principle that copyright ownership vests initially in the individual who creates the work. If the work is a “work made for hire” the publisher under copyright law will be considered both the author and copyright owner of the work. The significance of copyright ownership is that, as the copyright owner of the work, the publisher will own all exclusive rights in the work and therefore is able to commercialize the book publishing property to its fullest extent; publishing and distributing the work in print and other formats, creating derivative works, or by licensing or transferring the rights owned by the publisher to third parties. The publisher should also remember that the “work made for hire” doctrine pertains to much more than the just the “written word.” This doctrine also applies to any other type of copyrightable work in the book publishing process including illustrations, photographs, and book cover designs.

 

The Copyright Act’s “work made for hire” definition is two-pronged and provides that a work will be “for hire” if it falls within one of the following two categories. (1) The work will be a “work made for hire” if it is prepared by an employee of an employer (publisher) working within the scope of their employment. If this situation exists, copyright ownership belongs to the publisher unless an employment contract stipulates that the creation of copyrightable material is not within the scope of employment. If the creation of the work falls outside the scope of employment the employee, and not the publisher, would have copyright ownership of the work. (2) It is also a “work made for hire” if a freelancer (independent contractor) and the publisher (employer) agree in writing that the work to be created shall be considered a “work made for hire” and if the work was specially ordered or commissioned for use as one of nine categories of work enumerated in the Copyright Act: contribution to a collective work, translation, supplementary work, compilation, instructional text, test, answer material for a test, atlas, or part of a motion picture or audio-visual work. In this situation the publisher would own the copyright. If, however, the requirements are not strictly followed, the freelancer, and not the publisher, would have copyright ownership of the work.

For many years the question of whether a specific work was a “work made for hire” was a source of great confusion to the courts as judicial decisions generally focused upon the “manner and means” by which the hired party developed the creative work. In 1989 the United States Supreme Court resolved much of the confusion surrounding the issue of who was an “employee” and who was an “independent contractor.” The Court concluded that “common law agency principles” must be used to determine whether the work was prepared by an employee or an independent contractor. The Court enumerated the following factors that are instrumental in determining whether a hired party qualifies as an employee or is instead an independent contractor:

 

(1) the hiring party’s right to control how the work was accomplished,

 

(2) the skill required,

 

(3) who provided the materials and tools,

 

(4) where the work was performed,

 

(5) length of relationship between the parties,

 

(6) whether or not the hiring party could assign additional projects to the hired party,

 

(7) extent of hired party’s discretion over when and how long to work,

 

(8) method of payment,

 

(9) who hired and paid assistants for the project,

 

 (10) whether the work was part of the hired party’s regular business,

 

(11) whether the hiring party is in business,

 

(12) did the hiring party pay employee benefits, and

 

(13) the tax treatment of the hired party.

 

 Although the Court went on to say that these factors were not an exhaustive list they also noted that no single factor was determinative of whether or not a hired party would be considered an employee under the first prong of the “work made for hire” definition. The significance of this Supreme Court decision was its conclusion that the two prongs of the “work made for hire doctrine” were mutually exclusive. Furthermore this decision restricted the “work made for hire” doctrine under the first prong to “actual” employees while the second prong was held to be only applicable to independent contractors.

 

FOOLING AROUND

False advertisement is any type of advertisement that deceives consumers or affects their purchasing decisions. Even advertisement that only has the potential to be misunderstood by the consumers may be construed as false advertisement. Basically, false advertising is the use of false or misleading statements in advertising instead of telling the consumers the truth where ‘truth’ is the concept that the consumer has the right to know what they are buying.

To establish the fact that the advertisement is false, certain points needs to kept in mind:

a) a false statement of fact has been made about the advertiser’s own or another person’s goods, services, commercial activities;

b) the statement either deceives or has the potential to deceive a substantial portion of its targeted audience;

c) the deception is likely to affect the purchasing decision of its audience;

d) the deception is likely to cause injury/loss to the customer.

Types of False advertisement:

Usually, false advertisement is in the form of:

§ Failure to disclose:

Misleading misstatements or partially correct statements are considered to be ‘failure to disclose’ because they fail to disclose something the consumer should know. Sometimes even misrepresentation is not required. Merely not stating the truth can be a ‘failure to disclose’.

§ False and insignificant research:

Stating facts based on false and insignificant research can also be construed as false advertisement. For example, basing advertising claims on statistically insignificant test results can well be false advertising on the grounds of flawed and insignificant research.

§ Product disparagement;

Discrediting a competitor’s product to boost sales is called product disparagement and is considered to be a part of false advertisement as well.

Other than these, false advertising in a wider sense may include hidden fees and surcharges, manipulation of the standards and commodities, mixing of adulterants, over sizing of packages, using ambiguous undefined terms, etc.

LIABILITIES IN ADVERTISING

When an injury (a violation of the legal right) is caused to a third-party due to the advertising of a business house of its goods and services, advertising liability arises. Liability of a company to another is the company being legally obligated or accountable to the other company.

Publishers of advertising content are liable for the content of the advertisement as well as their traditional content.

Advertising liability can arise through:

i. Libel: It is the defamation of another person or company in a written or visual form.

ii. Slander: it is defamation by speech.

iii. Invasion of privacy: Invasion of privacy may come in different forms:

· It may be in the form of misappropriation (intentional, illegal use) of a person’s likeliness or name, usually for the commercial benefit of another.

· Intrusion into the private affairs of a person and his right to seclusion and solitude.

· Depicting a person in a false light through the use of publicity. Whether the depiction is objectionable is judged by a reasonable standard.

· Public disclosure of true facts (even if they are true), if it leads to embarrassment and are reasonably objectionable comes under invasion of privacy.

iv. Copyright infringement: It is what the name itself suggests. Using copyrighted material of another person or company gives rise to liabilities.

v. Trademark or trade dress claims: As in the case of copyrighted material, misusing someone’s trade dress (a business style or image that is unique or distinctive) gives rise to liabilities under advertising.

Other than aforesaid, liabilities in advertising may arise because of certain misappropriation claims or unfair competition claims.

 

Using the Name of Another in Commercial Setup

Under the present legal regime, you can be sued for using someone Else’s name, likeness, or other personal attributes without permission for an exploitative purpose. Usually, it has been observed in past that one run into trouble in this area when they use someone’s name or photograph in a commercial setting, such as in advertising or other promotional activities. But, International Legislations also prohibit use of another person’s identity for the user’s own personal benefit, whether or not the purpose is strictly commercial. There are two distinct legal claims that potentially apply to these kinds of unauthorized uses:

(1) invasion of privacy through misappropriation of name or likeness (“misappropriation”); and

(2) violation of the right of publicity. (The “right of publicity” is the right of a person to control and make money from the commercial use of his or her identity.)

WHO OWNS THE RIGHTS?

IF YOU PAY AN AGENCY TO CREATE AN ADVERTISEMENT FOR YOUR BUSINESS, WHO OWNS THE RIGHTS?

If your advertisement has been developed by an employee who is employed for this purpose, then, in most countries, you (as the employer) would own the copyright over the advertisement, unless you otherwise agreed with your employee.

However, many companies outsource the creation of their advertising campaigns to an outside contractor, and assume they own IP rights in it, simply because they paid for the work. Beware! You may be surprised to find out that you do not own the IP rights in what has been created for you. Independent contractors (unlike employees) usually own all IP rights in the works they create – even if you have paid for it –, unless otherwise agreed in a written contract.

• Copyright – In practice, the advertising agency will usually own copyright in an advertising campaign, as well as in copyrightable elements contributing to the campaign (such as colors, gifs, jpegs, setup, sound and music, photographs, etc.). Without a valid, written agreement transferring to you all these rights, you may end up owning nothing except perhaps a non-exclusive license to use your own advertising campaign. Different rules or exceptions may apply, such as in the case of commissioned photographs, films and sound recordings.

• Example: You commission a freelance advertising designer to create an advertising campaign for your company. The advertisement consists of a logo, some graphic illustrations, and text material. There is no agreement transferring all rights to you, so the copyright belongs to the designer (Copyright laws). A year later, you want to reuse some elements for another campaign. Under most copyright laws, you will need authorization from the designer, and may be required to pay an additional fee, to reuse the works. Before commissioning an advertising, it is better to enter into a clear, written agreement with the designer that spells out clearly as to who owns IP rights in each element of the advertising campaign.

• Trademarks – Unlike copyright, which exist from the moment of creation, trademark rights arise either from the use of a trademark in business in relation to the relevant goods or services, or from its registration. Accordingly, if an advertising agency creates a trademark or logo for your company, the agency will seldom own trademark rights, because it does not use the marks it creates in relation to any goods or services, and it does not apply for its registration as a trademark.

• Industrial designs – If you commission a freelance designer to produce a specific design for your advertisement, in many cases the ownership of IP rights will not automatically belong to you, but will remain with the designer.

• Patents – In some countries, where software patents are granted, you may have to consider filing for patent protection over certain aspects of rich media advertisements.

You should always have a written agreement with your advertising agent and other independent contractors, and specify the ownership details of each element of the work that will be created. Make sure that you receive ownership rights or a license that is broad enough so that you can use the advertisement (and all its elements) how and where you want. In negotiating and drafting such an agreement, consider the following issues:

• The price you pay for the creation of an advertisement will depend on who owns IP rights in the different components of the advertisement that are created by the advertising agency or designer (e.g., text, graphics, design, logos, music, etc.). For each element of an advertisement, you should carefully contemplate what you need to own versus what you only need a license to use.