The legitimate use of images for commercial purposes by the company is the use of image (or its components) in the company’s advertisement, presentations (or portfolio) of the company, in design or as a component of a website, on the company’s website, etc., exclusively with a written permission of the owner of this image, if such image and rights for its use are not in full ownership of the company.
A company that purchases a photograph for use for commercial purposes may separately purchase both right for use of the photograph and/or the photograph itself (as a file) with the rights for its use. In the latter case, the company acquires full ownership to such photograph.
Copyright to a photograph is valid throughout the whole life of the author of a photograph and for 70 years following his/her death, with few exceptions. The length of protection of photographic works is in line with Article 9 of the World Intellectual Property Organization Copyright Treaty 1996, to which Ukraine is a party. In addition, protection by the World Intellectual Property Organization Copyright Treaty and the Law of Ukraine “On Copyright Law and Related Rights” fully applies to the works over the Internet.
The laws of Ukraine provide for the exhaustive list of fair use of works. Pursuant to the Law of Ukraine “On Copyright Law and Related Rights”, the works of folk art, state symbols of Ukraine, state awards, symbols and signs of the state authorities, bank notes are not deemed to be IP objects and, therefore, do not require any permission for their use.
Fair use of a work with indication of the author and without the author’s permission is possible, inter alia, in the following circumstances:
- use of literary works and works of art to the extent justified by the intended purpose as illustrations in publications, broadcasts, sound recordings or video recordings of an educational character,
- reproduction, in order to present current events by means of photography or cinematography, to carry out broadcasting or other public communication of the works seen or heard in the course of such events to the extent justified by the information purpose,
- reproduction of works displayed at exhibitions, auctions, fairs and collections that are open to public in catalogues for coverage of the mentioned events, without use of these catalogues for commercial purposes,
- reproduction in newspapers and other periodicals for information purposes,
- free reproduction of graphic images for education.
As could be seen from the list, the use of a work for commercial purposes requires permission.
Any other use of a work, in particular processing, which leads to creation of the derivative work (including new photographic work, illustration, etc), is only possible with permission of the author or right holder of this work. Any other actions regarding use of a work are considered to be a violation of its copyright.
Legal basis of use of images for commercial purposes
Thus, legitimate use of an image for commercial purposes (in advertising, print production, on a website, etc.) requires permission for use of the image on the basis of the written agreement with the author or a licence provided by the author.
Disposal of proprietary IP rights by the author is made on the basis of the following agreements:
- licence for use of the object of IP rights,
- licensing agreement,
- agreement on creation on commission and use of object of the IP right,
- agreement on transfer of exclusive proprietary IP rights,
- agreement with the individual owner (author) of the image and rights to its commercial use,
- agreement with a photobank on commercial use of the image.
Agreements for disposal of proprietary IP rights are executed in a simple written form. In the event of failure to execute an agreement on disposal of proprietary IP rights in writing, such agreement is null and void and might be challenged in court or declared invalid.
Use of images from photobanks
One of the means of legitimate commercial use of image is execution of an agreement with a photobank and/or its official representative office active on the territory of Ukraine.
Agreement with a photobank has to be executed in writing along with provision of all supporting documents by a photobank: invoice, schedules to the agreement, transfer and acceptance act of rights to use an image, etc.
It is worth noting that not all photobanks, which act on the basis of public offer placed at their official websites, provide a written licensing agreement and supporting documents for the transaction, which might be requested, for example, by a state tax controlling authority during its audit of a company.
According to the agreement with a photobank, a photobank provides a licence for use of a photographic image (illustration, design, etc.) for commercial purposes of the company. In accordance with this agreement, the photobank guarantees that the rights to use the image for commercial purposes are ‘cleared’ and the photobank is liable in case of any claims to the company.
As an example, photobanks, which are officially active on the territory of Ukraine, provide all required documents for commercial activities, and also pursuant to the written agreement (licensing agreement), provide a guarantee that all rights to the image are ‘cleared’. The company is entitled to use this image for its commercial purposes and on terms and conditions specified in the written agreement (licensing agreement) with the photobank. In case of a breach of the guarantees provided by the photobank, the photobank undertakes to reimburse the company with all incurred expenses, losses, fines, etc.
There are two types of licence: Royalty-Fair and Right-Managed.
Purchase of Royalty-Fair (RF) images provides for one-time payment. Licensing under RF entitles the purchaser to use materials for unlimited time and there are no restrictions for formats and prints. The RF photo materials are not for sale, distribution in collections, rent, etc. In addition, the RF licence prohibits the purchaser to use the image in products where such images are the main part. This could be, for example, calendars, postcards, marks and other goods, which bring immediate profit to the seller. For such purposes, there is the Right-Managed licence.
Sale of a right to a photograph under the Right-Managed licence provides that the rights to use photographs may be granted on the exclusive basis with attachment to region, industry, printed copies, manner of use, terms, etc. In this case, exclusivity means restriction in relation to sale of rights for a particular term, on a particular territory, and also to particular individuals and companies (due to their activities).
Right-Managed licensing system might be divided in four types based on exclusivity rights:
- ‘exclusivity based on type of use’,
- ‘industrial exclusivity’,
- ‘spot exclusivity’,
- ‘full exclusivity’.
Also, purchase of any type of exclusivity rights does not limit use of images by mass media for illustration of a front page or other materials. Most of the images used in design are taken from the photobanks. Thus, if a website, a layout, or an advertisement is being developed for your company, it is vital to know whether the images used therein were bought from a photobank or taken from the Internet.
It is worth remembering that in case of disputes in relation to violation of copyright during use of images for advertising purposes, such disputes will be referred to your company and not to the designer, which used the image in his/her work.
In order to protect your company from such kind of disputes, you can search the image via Google Images or other Internet resources and identify the origin of the file and image.
Liability for breach of intellectual property rights
Protection of IP rights is provided in civil, administrative and criminal legislation by way of specification of forms, means and methods of protection. In addition, if breach of IP rights resulted in breach of legislation on protection of economic competition, a company can be fined in the amount of up to 5% of the profit (turnover) from realization of products (goods, works, services) in the last reporting year prior to the year, when the fine is imposed.