Monday, October 15, 2012

Arbitration Friend or Foe?

By Samuel Lewis Published in The Business of Photography
Arbitration Friend or Foe?
Even where the FAA may not be applicable, a majority of states have adopted the Uniform Arbitration Act, which, like the FAA, requires courts to enforce arbitration provisions. There are also international conventions that provide for the enforcement of arbitration provisions. Coupled with broad arbitration provisions, you may find that even the question of whether it's appropriate for parties to resolve their differences through arbitration is an issue that must be arbitrated.

The danger, of course, is that you'll agree to language so broad as to encompass nearly all disputes, someTimes with unintended consequences.

Professional mountaineer and photographer Neal Beidleman learned this lesson the hard way after granting a limited license to a textbook publisher. While the license permitted the publisher to use Beidleman's Mount Everest photograph in 40,000 textbooks, the publisher allegedly went on to produce in excess of 1 million copies of textbooks with the photograph. Beidleman sued for copyright infringement. However, because Beidleman's license required arbitration for various disputes, including the interpretation of the agreement, the publisher was able to force the matter out of court and into arbitration. Beidleman's arguments that the license expired, and that copyright infringement claims were beyond the scope of the arbitration provision, were ultimately determined to be issues that an arbitrator would have to resolve.

The widespread use of arbitration provisions in consumer agreements was sufficiently pervasive that it attracted the attention of the Washington, D.C.-based public interest group Public Citizen, which conducted a study of arbitrations in California and reported their findings. According to Public Citizen's report, the vast majority of arbitrations between corporations and consumers resulted in decisions in favor of the corporations. These types of findings have spurred on efforts to change the FAA. Among these efforts is the Arbitration Fairness Act of 2011, sponsored by Al Franken, the former Saturday Night Live comedian and writer, and now U.S. Senator from Minnesota. The proposed legislation seeks to limit the FAA by effectively preventing the use of arbitration agreements in, among others, consumer and employment disputes.

Bargaining Away Your Rights

Given the strong presumption in favor of arbitration, it may come as no surprise that even claims of copyright infringement may be subject to arbitration. Los Angeles-based photographer David Strick learned this lesson the hard way when attempting to enforce his copyrights.

In 2007, Strick—who made a name for himself shooting behind-the-scenes photographs of movie, television and music-video production sets for over 30 years—pitched the idea of a photography feature for the Los Angeles Times involving behind-the-scenes images of television and movie sets. The Times liked the pitch and entered into an agreement with Strick to produce "David Strick's Hollywood Backlot." In January 2010, the Times presented Strick with the third and final agreement relating to the feature.

In each of the agreements, Strick retained the copyrights to the images, regardless of whether the images were published. However, the retention of copyrights was rendered largely irrelevant by the grant of rights to the Times under the agreements. For images taken on assignment, Strick granted the Times "a fully paid up, perpetual and irrevocable license to any and all rights (including, e.g., copyrights) in any of" Strick's photographs accepted for publication or published by the Times or its licensees. So although Strick retained copyrights, the Times arguably retained the right to use his images if they were taken on assignment.
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