Wilson Lue LLP Patent & Trademark Agents, Intellectual Property Counsel

Stock images: use them wisely

Take care when selecting stock images for your business now, to avoid legal tangles in the future

PUBLISHED February 2019 IN Copyright & Designs, Enforcement & Defence, Contracts & Licensing

For many businesses, stock images are a low-cost source of creative material for logos, advertising and websites. Unfortunately, we hear too often from businesses on the receiving end of demands from stock agencies for thousands of dollars for misuse of images.

Many stock agencies sell access to online portfolios of photographs, illustrations, and videos. Stock agencies protect themselves by monitoring the internet for suspected copyright infringers, often using automated tools. Suspected infringers may be presented with an invoice for the licence cost, often with a punitive factor added in. Stock agencies sometimes resort to copyright lawsuits to collect compensation and to deter other infringers.

Unfortunately for some businesses, images may have been properly licensed, but the paper trail may have gone missing. Others may have wrongly assumed that their designer had taken care of any legalities involved in using third party images—or that their designer had created the images.

Fortunately, businesses looking for cost-effective creative design work can manage these risks with a few basic practices:

  • Purchase the proper licence and comply with its restrictions
  • Document purchases
  • Hire reputable freelancers
  • Don’t use stock images as logos and corporate branding

Get the right licence

When a business purchases “an image” from a stock agency, it is actually purchasing a licence to use the image. The licence should permit the specific uses that the business intends for the image. Unfortunately, many businesses do not realize that “royalty-free” does not mean “no payment required”, or “free for all uses”.

Stock licence fees rarely buy permission to use an image in any way possible. Most stock images are licensed under “rights-managed” or “royalty-free” terms. Under “rights managed” terms, fees apply on a per-use or case-by-case basis determined by factors such as type of use, extent of distribution, and duration. Rights-managed terms allow the stock agency to ensure that the image is not used for a competing purpose by another licensee at the same time. Under “royalty-free” terms, in exchange for a one-time payment, the purchaser receives a right to use the image, which can include multiple projects, not limited in time.

Typically, “royalty-free” terms give the purchaser greater freedom. However, even under royalty-free arrangements, certain uses may be prohibited. For example, the terms may forbid the use of the image with print-on-demand products like t-shirts and calendars, or downloadable products like electronic templates and wallpaper. Some licences limit the number of impressions or reproductions (which can include web page views) that may be made. Some images may be available for “editorial use only”, meaning they cannot be used for advertising, because releases were not obtained for the people or places visible in the image. Use beyond these limitations may require additional permission, additional licence fees, and possibly model releases. Without the additional permission or licence, use beyond the original licence terms may constitute copyright infringement, breach of contract, or breach of personality rights.

Ultimately, a business should review the terms for any stock images it is purchasing. If the terms are unclear or do not allow the business to use the images for the intended application, the business should negotiate different terms or obtain images with more permissions.

Document purchases

Businesses should retain any “proof of purchase” documentation when purchasing stock images. Simply possessing a copy of the high-resolution downloaded graphic is not enough to prove that the business has purchased rights.

If the image was obtained from a stock agency’s website, particulars of the licence transaction would likely be documented in the agency’s records, and the purchaser may have received e-mail confirmation of it licence fee payment. Years down the road, though, the purchaser may have lost that e-mail confirmation or access to the online records. If the business obtained the stock image through a consultant, then the business may never have received any documentation.

Keeping an offline or paper record of the licence transaction can help prevent headaches, should the need arise to demonstrate that use of a stock image was properly licensed. If the stock image was obtained through a contractor, then the purchaser should obtain a copy of the documentation from the contractor.

Use reputable freelancers

Due diligence is also important when sourcing materials through a consultant or freelancer. Businesses using a designer or other contractor for design work often assume that the contractor has dealt with any legal or contractual issues regarding the use of creative works as part of the project under contract. However, not every contractor understands the nuances of licensing third-party material. Hiring a reputable contractor is one way to address this. Additionally, both the client and contractor should understand and agree who will be responsible for clearing rights or obtaining permissions—including copyright, trademark rights, and personality rights (occasionally, model releases may be required)—and record those responsibilities in the contract setting out the contractor’s scope of work.

Even if the contractor is retained to provide original designs (such as a logo or trademark) for the client, the cautious client will still engage in due diligence. Not every contractor actually produces creative works in-house—some outsource the work, and may even crowdsource it. The client should ask the contractor who will be preparing the designs, and who will be handling any rights issues. It may even be appropriate for the client to request an indemnification and warranty against allegations of intellectual property rights infringement.

A cautious business will also investigate the originality of work received from contract designers, for example by comparing it with the designer’s style represented in his or her portfolio, and by asking to see the rough drafts and sketches leading to the finished design. A business could even conduct its own online image searches (using resources such as stock image websites and Google image search) to see if the design bears too much resemblance to existing stock images to be explained away by coincidence.

Independently investigating the originality of an image or design requires is not always straightforward or foolproof. But given the potential cost of infringement, sometimes a little prevention is worth a pound of settlement.

Logos and corporate branding

Businesses should avoid using stock images as logos and corporate branding that they want to protect as trademarks. Trademarks are better developed from original material because stock images are generally not created a single purchaser’s particular requirements and exclusive use.

Stock agencies typically retain the right to licence their images to others in the future, and may have already licensed their images to others—perhaps even to a purchaser’s competitors. These other users may destroy any potential distinctiveness in a stock image, or a design developed from a stock image, impeding its use as a trademark. Moreover, most stock agency licence agreements expressly prohibit the use of their stock images in trademarks, logos, service marks, and other corporate identifiers. If a business hires a contractor to develop logos and other corporate branding, then, it should use the same due diligence tools described above to ensure that it receives original work that can withstand scrutiny under trademark law.

With some basic due diligence, businesses can avoid expensive disputes with stock agencies.

A version of this article was originally published by The Lawyers Weekly in June 2009. This version has been revised and updated, and still applies in 2019.



Graham Honsa
Graham Honsa
Graham advises clients on intellectual property matters including copyright licensing and infringement.