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Why You Need to Cover Yourself

Let’s say your copywriter came up with a brilliant campaign. You have the designers come up with a creative, beautiful ad campaign, but they want to use material from an artist not on the in-house team. Let’s say said artist saw his or her artwork in a campaign and files to sue for not receiving royalties or for not giving permission. (Although this is an extreme example, sometimes things might be out of sight and the lines can get blurry). Bottom line: you need an insurance provider to cover you in these copyright infringement situations.

Some common scenarios that could strike up a case:
(why you should get covered)


#1 Breach of Scope of License

Representatives of an advertising agency, working on behalf of a fast-food restaurant, approach the creators of a canine cartoon character with an idea for making use of the character in an upcoming campaign.The cartoonists agree to create art boards that incorporate their dog character and the restaurant brand. They submit the boards to the agency in the belief that, if the agency uses the idea in the campaign, they will be paid. The agency proceeds to develop a campaign based on a real dog of the same breed that has many of the same characteristics and “personality” traits as the cartoon dog reflected in the art boards. The cartoonists, who receive no compensation, sue the agency. They contend that the submission of the art boards included an implicit limitation on the scope of their use and that any other use of the ideas without compensation exceeds the implicit license. The trial court grants in part the ad agency’s motion to dismiss, but permits some claims to proceed.

(source: Marketing, Advertising, and Communications Liability Insurance – Hiscox)


#2 Copyright Infringement

An advertising agency is retained by a baked-goods company to develop a campaign that emphasizes the company’s “old-fashioned” image. While researching folk art for the campaign, an agency executive comes across a cookbook that is handwritten and distinctively illustrated. The executive contacts the author and invites her to submit illustrations and handwriting samples for the campaign, which she does. The agency then hires another artist to execute the final ads, with instructions to base drawings in the advertisements on the handwriting in the cookbook. The cookbook author sues the ad agency for, among other things, copyright infringement. After a year of discovery, the trial court grants summary judgment for the agency on all claims except the infringement count. That claim proceeds to trial, which lasts six days.

(source: Marketing, Advertising, and Communications Liability Insurance – Hiscox)


#3 Errors and Omissions

A chain of Italian-themed restaurants engages an advertising firm to create and produce a series of television commercials, the underlying theme of which was an emphasis on family. One of the commercials depicts a family enjoying a festive meal at the restaurant. The music playing in the background is a distinctive song associated with a famous deceased recording artist, and the singing voice bears a striking resemblance to that artist in tone and style. The artist’s widow sues the restaurant and the agency for unfair competition, unjust enrichment, misappropriation of the right of publicity, false advertising, and interference with prospective economic advantage.

(source: Marketing, Advertising, and Communications Liability Insurance – Hiscox)


#4 Misappropriation of Name/Likeness

A department store chain hires an advertising firm to produce a series of newspaper ads featuring clothing from the store’s private label. One of the ads is for a line of athletic shirts and features a man wearing a jersey. The words “This is Ron” appear beside the photograph, with an arrow pointing to the man. Below that appear the words “This is Ron’s jersey,” with a second arrow pointing to the shirt. Ron Jersey, a famous rock musician, sues the agency and the department store for, among other things, misappropriation of his name. The agency and department store file an early motion for summary judgment, which is denied. The parties then pursue discovery over a period of nine months, at which point the plaintiff files a motion for partial summary judgment.

(source: Marketing, Advertising, and Communications Liability Insurance – Hiscox)


Whatever your scenario — big or small — it’s crucial to get yourself covered. Find out more about getting coverage by going to insurance.vma.bz.

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