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Infringing as a Licensee

Posted: Wed Nov 24, 2021 12:23 pm
by cannonking
Hi there,

Quick question this time around, if you'd be so kind.

I'm looking at taking at a license for manufacturing and selling physical copies of a 3D digital sculpt. The digital sculpt is an original work by an artist in that it is not a replica of any pre-existing sculpt. There is some doubt however, as to whether the design concept behind it is completely original. It's certainly not a carbon copy of any pre-existing artwork/sculpt, but it clearly draws a significant degree of inspiration from a character designed by a third party.

If I take a license to manufacture physical copies of this 3D Digital sculpt, and another party subsequently claims to own the IP behind it, am I liable? Can they order me to cease and desist from making and selling copies, or do they have to go after the licensor who I paid good money to? At what point does my license become null and void? And if I am the one that is at risk, do I have the right to go after my licensor for damages if I get hit in court?

Thanks in advance!

EDIT:- For the record, it would be under sections 17-20 of this license here, where I pay the artist a set fee in advance for the files and a production license:- https://www.cgtrader.com/pages/terms-an ... ee-license

Re: Infringing as a Licensee

Posted: Wed Nov 24, 2021 1:31 pm
by AndyJ
Hi cannonking,

You are right to be cautious. By manufacturing these items under licence you would be liable for secondary infringement (see sections 23 and 24 of the Copyright Designs and Patents Act 1988) if the digital design file was found to be an infringing work. The author of the design file would be liable for primary infringement. However since the author of the work which was being infringed is more likely to want to prevent the widespread distribution of copies of his work, he might well choose to go after you rather than the author of the digital file.

There is a partial defence to secondary infringement if the copying was done without the knowledge or suspicion that the digital file was in fact an infringing work, but even if you were able to rely on that, you would still face an order of the court for the seizure and destruction of any copies already made, and if necessary, an injunction which prevented you from making any copies in the future. The partial defence, if accepted by the court, would only prevent you from being liable for damages. As you have already expressed some doubts about the originality of the digital design, that might constitute reasonable belief that the digital work might be an infringing copy. Any finding by a court that the digital file was an infringement of an earlier work would indeed render your licence void.

In order to mitigate the liability for possible damages and the financial loss due any seizures etc arising from a claim for secondary infringement you need to ensure that the licence agreement explicitly states that the licence seller warrants that he will be liable for any infringement claims which may be made against you. This provision would mean that you would subsequently be able to sue the seller to recover* your losses if you were successfully sued by the original copyright owner for infringement. Not ideal as it would mean you had to deal with two separate causes of action, but might act as a warning to the seller of the licence about his responsibilities towards you.

Bear in mind that it may not just be copyright which you need to consider. Design right may also be relevant, depending on the nature of the article concerned: see sections 227 and 51 CDPA. Note that section 51 effectively says that copying the design for an artistic work is infringement. The other thing to note is that section 227 includes the same provision as that found in section 23 and 24 regarding knowledge or suspicion that the second work (the copy) was infringing.

Afternote. I have just seen your follow on comment. You need to be guided by para 20.3 of those terms.
20.3. Certain Products with third party copyrighted or trademarked images, logos, brand names, etc., may require additional licensing, rights, permissions, releases, or clearance for use. It is the sole responsibility of the Buyer and their legal advisor to determine, before purchasing, downloading or using any Product, whether additional licensing, rights, permissions, releases, or clearance are necessary for the intended use of Product. It is the Buyer’s sole responsibility to obtain any licensing, rights, permissions, or clearance. Buyers should understand additional licensing, rights, permissions, releases, or clearance may be relevant for Product, if the intended use involves religious groups or affiliations, pharmaceuticals, health care, tobacco, liquor, adult entertainment, personal hygiene, birth control, or any other area that could be considered sensitive, offensive, or immoral.
Of course I am not offering you legal advice here, just advice based on how the law works (there is a difference!).


* Realistically this would only be a viable option if the licence seller is based in the UK. Trying to get him to reimburse you from a foreign jurisdiction, even with the warranty clause, would be expensive if you needed to go through the courts.