iStockphoto up Close, Is It Risky?

iStockphoto, a Canada-based, stock photo company, has attracted the attention of the stock photo industry by enabling users to cross two industry barriers: price and portfolio size. Usually priced at $80-$400 for a one-month subscription, stock photography has traditionally been priced out of the reach of the casual user or even some publishers with shoestring budgets. With a price range of $0.50 to $1.50 per item, iStockphoto has undercut the pricing of most stock photo companies. Even some publishers just looking for a good deal have been lured by its low prices.By not requiring contributing photographers to establish a portfolio of at least 10,000 to 20,000 images, as other sites do, iStockphoto also has created a forum for little-known photographers.Like most stock photo companies, iStockphoto uses two primary online user agreements: Content License Agreement and Membership Agreement. (The company's Web site also references an Upload Agreement, which is similar to the Membership Agreement.) Consider the SourceiStockphoto relies on photographer contributions for a large percentage of its content and acknowledges that it does not check the source of that content. As a result, potential liability for copyright and trademark infringement is passed on to anyone downloading the images through the user agreements. So, it's important that users understand the legal implications of these agreements, if only to avoid the cost of complying with a cease and desist order. Here are the highlights:Content License Agreement- The license is perpetual, non-exclusive, and non-transferable. This means that while you can use downloaded contents for an indefinite period of time, so can anyone else who downloads the same content, provided he gets it from iStockphoto, not you.- iStockphoto retains all intellectual property rights in downloaded content. This means that although you will own any "derivative work," essentially a creative work that incorporates the content, but is not "substantially similar" to the content, iStockphoto still owns the original downloaded content. This is confusing where some of the images seem designed to be used substantially as-is (e.g., file 105897 containing the image of a woman holding a blank sign onto which the user is instructed to superimpose a message or logo).- The license permits commercial and personal use of the content in a derivative work, but prohibits non-derivative uses of the content in posters, print-on-demand products, logos and trademarks.- The license prohibits using content images that depict someone in a "potentially sensitive subject matter," which iStockphoto indicates includes depictions of mental and physical health, social issues, as well as contraband or crimes. What iStockphoto wants to avoid is being hit with a libel suit if Jane Doe recognizes her unauthorized image in an antidepressant ad. The problem with this requirement is its vagueness. Whether an image involves a sensitive subject matter depends on the viewer's values.- How free is "royalty free"? iStockphoto advertises itself as a "royalty free stock photography community." In large part, this is probably true. But in the Content License Agreement, iStockphoto disclaims any guarantee that its content will be royalty free. The Content License Agreement also states that users reproducing a downloaded item more than 500,000 times, presumably even as part of a derivative work, will be billed $0.01 for each reproduction in excess of the first 500,000. For an advertiser with 1 million copies of an ad derived from iStockphoto content, that's a $5,000 bill. Membership Agreement- iStockphoto acknowledges that its content may contain third party proprietary rights, which means there is no guarantee you are not infringing on a copyright by publishing any of the images. If you plan to invest significant time or money in creating a derivative work from iStockphoto content, it may be a good idea to double-check the content's origin with the user who uploaded it.- iStockphoto users are required to indemnify (pay) iStockphoto, its affiliates, owners, agents, licensors and information providers (the latter two could include other users) for losses any one of them incurs as a result of a user's download of iStockphoto content, upload of files to iStockphoto, or breach of Membership Agreement warranties. The indemnification obligation even applies if an unauthorized person uses another member's name. The Membership Agreement also requires that users cooperate with iStockphoto's defense, despite the fact that their interests are likely to conflict with that defense. - iStockphoto reserves the right to terminate a user's membership at any time. The Membership Agreement does not clarify whether users can continue using content they downloaded before the membership termination date. iStockphoto should not be able to halt permitted uses under an already existing perpetual license. Despite these legal concerns, iStockphoto may still be the right image source for a particular project. Just be certain you first understand and agree with all the terms of the user agreements.- Ola L. ClintonOla L. Clinton is an attorney with the San Francisco office of Holme Roberts & Owen LLP, where she represents privately and publicly traded companies, including those in the printing and publishing industries, in a variety of business and intellectual property transactions. She can be reached at Holme Roberts & Owen, One Maritime Plaza, Suite 2400A, San Francisco, CA 94111, 415-268-1966, or Ola.Clinton@HRO.com.This article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general, informational purposes only, and you are urged to consult counsel concerning your own situation and any specific legal questions you may have.iStockphoto's low prices come with some risk. Make sure you know what you're agreeing to when you sign on.

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iStockphoto up Close, Is It Risky?

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