Periodically, I encounter photographers who are frustrated with the agents and stock photo agencies that license their work. Although the particulars may vary, there are some common themes: agencies that take too high of a percentage of the license rates as a fee for passively licensing photographers’ images, agencies giving publishers favorable pricing at photographers’ expense, agencies that seem to take forever to issue checks to photographers and agencies failing to pursue unpaid license fees or even account for certain uses of images.
That’s not to suggest that all agencies are bad or that one is necessarily better than any other. For photographers with images that aren’t being actively marketed and licensed, using one of the various stock photo services can be a way of deriving additional revenue from images already created. For photographers new to the business, such services may be the only way to have your work used by certain publishers.
Still, dealing with agencies can be frustrating, particularly where one has not read the fine print in the photographer’s agreement with the agency. I recently commiserated with a photographer who discovered that one of the photos he had uploaded to a stock photo service had been published in a magazine, and yet, the stock photo agency had not tracked the magazine’s downloading or use of the image. When the photographer investigated the possibility of sending a demand letter to the magazine, he soon learned that his contract with the stock photo agency actually gave the agency the right to decide whether to enforce his copyrights. He also discovered that stock photo agency’s agreement potentially made the photographer financially responsible to the agency in the event he took steps to enforce his copyrights in any images that the agency licensed.
Although many photographers may not realize it, one of the sources of angst between photographers and the agencies who license their work is the fundamental tension that exists between common notions of agency law and the contracts that ultimately control the relationship between photographers and the agencies. At the risk of stating a truth bordering on the absurd, the contracts between stock photo agencies and photographers create a situation where your agent might not be your agent.
The Basics Of Agency Law
Agency law governs the relationship between a person—the agent—who acts on behalf of another person—the principal. Such relationships typically arise in commercial settings and may be created by contract or arise under law by virtue of the nature of the relationship. For instance, the relationship between an employer (principal) and employee (agent) often involves issues of agency law without there being any written agreement establishing an agency relationship. On the other hand, when a photographer (principal) enters into an agreement with a stock photo agency (agent) to license the photographer’s work, the contract typically defines the nature of the agency relationship.
Fundamentally, there are two basic legal concepts arising from an agency relationship.
The first concept involves authority. An agent has the authority to act on behalf of the principal, and that may include entering into contracts with third parties on behalf of the principal. There are two types of authority: actual and apparent. When a principal expressly gives certain powers to an agent, such as when a photographer enters a contract authorizing a stock photo agency to license images, the agent has actual authority. Apparent authority is a more complicated concept. At the risk of oversimplifying matters, apparent authority exists where a third party has reason to believe that the agent is acting within the scope of his or her authority, even though the agent has exceeded the powers granted by the principal. In such circumstances, the agent, but not the third party who relied upon the agent, may be liable to the principal for the unauthorized actions taken.
The second concept involves trust. Agents traditionally owe their principals a duty of loyalty, meaning that the agent must exercise care to protect the interests of the principal. In part, this requires the agent to avoid conflicts of interest. Agents who act in their own interest, and to the detriment of the principal, violate that duty of loyalty by elevating their own interests above those of the principal. In simple, one-on-one agency relationships, it may be easy for the agent to avoid conflicts of interest. On the other hand, where the agent represents the interests of multiple principals, avoiding conflicts of interest may prove to be problematic or even impossible.
While we may not think of relationships in quite these terms, the basic concepts—authority and trust—nonetheless tend to be inherent in many different types of commercial relationships. Indeed, the basic concepts may be so firmly ingrained in our thinking that we experience a sense of betrayal when we perceive a violation. Consider, for example, a situation where a stock photo agency decides to license an unlimited number of photos to a magazine for a flat monthly rate and then divides the photographers’ share of the monthly fee among the photographers whose images are used. As one of the photographers in that scenario, one might view the agency as placing its own interests—receiving a set amount of income from a publisher on a monthly basis—above the interests of the photographers providing the images.
As with so many things in law, we are generally at liberty to contract away our rights. Thus, while we may intuitively expect that a stock photo agency will be looking out for the interests of the photographers whose work it attempts to license, the contract with the agency may create a completely different situation. It’s therefore critically important that photographers understand the contracts they enter with agencies.
Contract Concepts Worth Considering
If you’re contemplating working with a stock photo agency, you need to look beyond the outward appearances and even the FAQs appearing on the agency’s website and consider how the agency’s agreement defines the nature of your relationship. A number of stock photo agencies have copies of their agreements online, and the investment you make in comparing and contrasting those agreements will likely pay dividends.
For example, you should consider the efforts that the agency will take on your behalf to license your images. While the agreement may clearly provide that you’re appointing the agency as your “non-exclusive agent to license, sublicense and distribute” your images, it may be more of a challenge to find any language suggesting the efforts that agency will be obligated to take on your behalf. Unfortunately, it’s not uncommon to find this concept swept under the rug and the agreement silent regarding such obligations.
iStock, to its credit, is relatively candid regarding some of the limitations it places on the relationship with photographers. For instance, the agency’s contract doesn’t guarantee that photographers will receive a photo credit and instead requires only that the agency “use commercially reasonable efforts to credit you as the source of [the images licensed], but shall have no liability for lack of credit.” While it may sound strange to credit an agency for being candid about the limits of its obligations to photographers, the fact remains that some agencies won’t include language clearly defining the limits of what they will or won’t do.
In some cases, agencies may even resort to using flattering language in an effort to obfuscate the true nature of the relationship. For example, one agency’s agreement indicates that the agency “only accepts and licenses [images] that meet [the agency’s] highest standards.” It’s easy to get caught up in that sort of laudatory language and then overlook the related language indicating that “licensees pay a flat fee for each [image] and may make broad use [of licensed images].” If the agency only licenses images that meet the highest standards, it stands to reason that the agency would attempt to maximize the license fees for the use of such images, as opposed to accepting a flat fee in exchange for broad usage rights.
Watch out for language that limits your rights. While some of these restrictions may be reasonable—avoiding a situation where multiple agencies are simultaneously attempting to license the same image—others may limit or even take away certain rights.
Shutterstock’s terms of service, for example, include a section addressing copyright infringement claims, and those provisions actually limit a photographer’s ability to pursue claims involving images uploaded to the agency. Under the terms, photographers grant Shutterstock the “right and authority to take such steps as Shutterstock deems commercially reasonable to protect Shutterstock’s rights” in the images the photographer uploads to the agency. The terms then go a step further and expressly provide that the photographer “shall take no action without providing notice…to Shutterstock and receiving Shutterstock’s prior written consent to such action.” The same section indicates that “Shutterstock has no obligation to pursue legal action” against any alleged infringer. Thus, the agreement requires that a photographer seek and obtain permission from Shutterstock before pursuing a claim of infringement and may result in a situation where a photographer is unable to pursue a claim.
Don’t be misled by purported summaries of sections of the agreements. Shutterstock’s terms also include a series of text boxes immediately to the right of the terms of service. While these may appear to be explanations of the legal verbiage in the terms, in at least one instance, the statements are ironically contradictory in nature. Immediately next to the provisions limiting a photographer’s right to pursue claims of infringement, the agency includes a statement that it “respect[s] your rights and may take action to protect your [rights]. If you suspect potential misuse of your [images], please contact us with the details before taking any action directly.” Such statements stand in stark contrast to the actual limitations appearing within the terms.
Shutterstock is not the only agency to restrict a photographer’s ability to enforce his or her rights. iStock’s agreement also includes language that gives it “the right to determine whether and to what extent to proceed against a licensee or other third party (an ‘Infringer’) for any violation of a license agreement or alleged infringement of any other of your rights.”
While it may be easy for an agency to justify imposing restrictions against enforcement of copyrights, the mere existence of the restrictions also highlights the reality that the agency’s interests are not entirely aligned with those of the photographers whose work the agency is attempting to license.
Watch out for language that allows the uncompensated use of your images. At least one of the stock photo agency’s agreements includes language that allows the agency to use a photographer’s images for its own promotional purposes without any obligation to compensate the photographer for such use. The use of an image to promote an agency may render it less desirable to paying publishers who might have otherwise licensed the same image.
Finally, you need to understand whether the agreement with an agency includes an indemnification provision and if so, the nature of the obligation it imposes on you. Simply stated, the concept of indemnification involves compensating someone for harm or loss. In the context of a relationship between a photographer and a stock photo agency, it wouldn’t be unusual for the agency to expect the photographer to indemnify the agency in the event someone claims that the photographer’s images infringe copyrights or the photographer failed to obtain model releases. It is one thing to agree to indemnify an agency for narrow situations; however, it’s not uncommon to find the indemnity provision phrased more broadly so that it encompasses just about any breach of the agency’s agreement with the photographer. Since these sorts of provisions typically require providing a defense (or, more precisely, paying the cost of lawyers to defend against a claim), the indemnification provision may have a significant financial impact on the photographer.
Learn It, Know It, Live It…
Unless you’re actively licensing all of your work—and let’s face it, most working professionals simply don’t have enough hours in a day to do so—working with an agency can be a good way of putting otherwise dormant images to work and realizing some passive income. However, before you decide to work with an agency or select one over the other, take the time to read and understand the agency’s agreement. Doing so will not only set expectations for your relationship with the agency, but it will also help ensure that you don’t encounter any surprises down the road.
Samuel Lewis is a Board Certified Intellectual Property Law specialist and shareholder at Cozen O’Connor in Miami, Florida, and a professional photographer who has covered sporting events for more than 30 years. He can be reached at [email protected] or [email protected].