Is it okay to purchase stock images in the developer company name?

Question

We've used some stock images (vector graphics) on a Flash website we created recently. We're just about to purchase a web license for the same that allows "unlimited use of the vector graphic on websites and print media". Can we purchase this in our company name? This would be better since we could use the stock images on other projects as well. Or do we have to purchase the stock in the name of the client? The website is copyrighted by the client, we are just the designer/developer.

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The exact license terms are as follows (its a Fotolia.com "V" license)

• What I can do
  • Use the image in print and electronic documents, as well as web pages
  • Modify image or use in derivative works
  • Make backup copies
• What I cannot do
  • Resell the original image
  • Use image in any way that violates local or federal laws
  • Distribute copies of image to friends, family or other organizations
  • Use this file on adult industry or dating sites

Answer 1

Your proposal means that you buy the image and then either

• sell the image to your client, perhaps for nothing or as an included fee in the full project price;
• keep a copy of the image yourself and distribute a copy to your client (perhaps for a fee, or maybe not).

Both of these are explicity forbidden by the licence, which states that you may not:—

• Resell the original image
• Distribute copies of image to friends, family or other organizations

You may be buying the image on behalf of your client, but you are simply their agent. The image should belong to them and they become the licensee. They should be made aware of the licence you are signing them up to.

For a complete assessment, you need to take the licence agreement and a copy of your contract with your client to a corporate/IPR lawyer. The opinion stated here is not legal advice.

Answer 2

By reselling images to clients, most agencies and design firms are probably falling into a grey area in terms of violation of these license agreements. This is a very interesting legal issue that must be causing conflicts on the order of thousands of times a day. We all buy stock and use it in work. That's what stock images are intended for. As an agency, you are open to a potentially huge liability from either of two points:

1. The stock agency could aggregate the infractions of all the stock images that were in violation of the terms and demand recompensation. To my knowledge this has not happened - but we are not a large agency...it would not be in the best interests of longterm client relations...

2. Any client could sue for damages for images that were ostensibly sold to them fraudulently. This is also unlikely, because the client is unlikely to know the terms of the license - unless the stock house approached them, and as broad "royalty Free" licenses are most prevalent with images, it would prove a challenge to track.

To avert the liability, you should probably buy the stock images in the customer's name, OR put clear verbiage in your agreements with clients that the rights to these broadly licensed stock images may be subject to certain legal encumberances.

We negotiated a contract with a big major brand client recently, the boiler plate contract initially demanded all sorts of broad copyright and licenses be granted as defacto. We lined through all such broad statements and demanded that each project description define the specific copyrights to be transferred, and that all stock images, soundtracks, movie clips, personages, likenesses, copy, intellectual property, processes, patents, and trademarks be specifically defined AFTER the project completion. It was not simple.

I concur with Andrew, definitely seek legal advice for the broad contracts.