Commercial use of copyrights and the impact of working relationships on licensing negotiations

In May 2022, the Swedish Patent and Market Court of Appeal rendered a decision in Case PMT 4780-21, the result of which may have repercussions for the future of working relationships with regards to the commercial use of copyrights.

The plaintiff, a Swedish photographer, had an idea to take pictures of Holocaust survivors and collect their testimonies, with the intention to use them in an exhibition. She approached Fotografiska museet (the museum), who were interested in hosting, suggesting she find a partner and indicating that the exhibition should be digital, as the material could later be distributed among schools. The photographer partnered with an NGO, the Raul Wallenberg Academy for Young Leaders (RWA).

The photographer began to interview and photograph Holocaust survivors, with the resulting pictures and testimonies used during the physical exhibition, as well as within an accompanying mobile application. The material was also used on RWA’s social media channels and at events. The RWA agreed to hire the photographer as a consultant for the project, with the agreement stating that she would own the IP rights. The agreement also stipulated the RWA’s own use and third-party use through the RWA of the material created by the photographer. Needless to say, each party’s interpretation of the agreement differed significantly.

Findings of the Patent and Market Court

The Swedish Copyright Act includes caveats that allow for the voiding of many of the provisions that it details, so the first step for the Patent and Market Court (PMD) was to assess if the dispute issues were sufficiently regulated in the agreement and establish that the agreement took precedence over the Swedish Copyright Act. The court stated that the dispute, and any ambiguities, must be interpreted in favour of the IP rights holder (the specification principle), and that an assignment of rights cannot include more than what is stated in the agreement (the specialty principle).

The PMD also established that the museum claimed early on that a digital solution would be necessary, as they intended to distribute the material to schools once the main exhibition had ended, and that all IP rights used, such as photos and testimonials, were owned by the photographer. Finally, the PMD noted that the RWA, following agreed payment, had obtained a licence to use the material themselves, as well as the right to sublicense the material to a third party with payment of an additional fee.

The photographer claimed that the agreement was time limited, ending when her work as a consultant concluded (inter alia supplying material for the exhibition), and that any further use of the material by the RWA was no longer permitted unless further compensation was proffered. The PMD noted that the section of the agreement dealing with ownership and licensing of IP rights expressly states that there was no limitation in time, a view supported by witness statements. The PMD added that it must have been evident to the photographer that the RWA intended to use the material following the close of the exhibition, regardless of whether the rest of the agreement (dealing with initial preparation and execution) had a clear termination date.

The PMD elaborated, stating that despite the photographer and the RWA having separate agreements with the museum, it was evident that the exhibition was a joint effort between all three parties. It was the photographer who had initially contacted the RWA about partnership, and all three parties had been involved in discussions and planning of the exhibition. Thus, any assignment of IP rights to the museum cannot be interpreted as third-party sublicensing by the RWA and would therefore not entitle the photographer to any additional compensation. Similarly, the PMD found that the use of intellectual property within the app, at events or on the RWA’s social media, was all in connection with the exhibition, and therefore not sublicensing or subject to additional compensation. The court also found that the evidence presented by the photographer was not sufficient to establish a breach of the photographer’s moral rights to be mentioned as originator of the works.

Findings of the Patent and Market Court of Appeal

The Patent and Market Court of Appeal agreed in all respects with the PMD, confirming the lower court’s decision. The appeal court, after reviewing the case, confirmed in each detail that the evidence invoked by the photographer did not support the claims she was making.

Comment

The main issue here is one of compensation for alleged unauthorised use and sublicensing to third parties without compensation to the rights holder.

The outcome clearly underlines the importance of invoking sufficient and unambiguous evidence to support the claims made, including why clear wording in a section of an agreement should be disregarded, rather than making unsubstantiated allegations of certain circumstances. This is particularly important in cases where the rights holder has a strong emotional connection to the works created. Finally, just because the plaintiff is a small company or physical individual, they may still be required to pay litigation costs should the decision not go their way.