Legalities 18: Talking Heads: Is it Safe to Create Animated Characters Based on a Customer’s Photo?

This month’s question again returns us to the rights privacy and publicity, as well as copyright and fair use. These rights should be considered whenever your work depicts real people, or if you start with a pre-existing photo.

Q. I am a website designer and graphic artist with a legal question. As a service, I will take a photograph supplied by a customer, and make it look like it is blinking or speaking. There’s a technical process here I won’t burden you with, but the end result is an onscreen character that you can basically make say anything you want. In general I’ve been doing this with individuals’ photographs, now I’ve been asked to create one of ‘Ace Ventura.’

For clarification, I’m not using the picture for any commercial purposes of my own. The customer supplies the photograph, I make modifications to the photograph, and return the results of the work.

My question is, if I charge $10 for the service, and the customer supplies the image, am I liable for damages if there is a legal issue? Would the presence of a ‘service agreement’ which the customer must agree to, and I disclaim all liability, before I perform the work help clarify this?

I assume this is considered ‘commissioned artwork’, and while I’m somewhat familiar with copyright law, I’m uncertain with the rules on how they apply to this particular scenario. I also assume this is considered ‘work for hire’, and that the legal ‘ownership’ of any derivative work belongs to the customer. Please let me know if this is incorrect. I appreciate any clarification you might be willing to offer. Thank you in advance for your assistance.

A. This is a very interesting question. I think whether you would ultimately be liable for the work you do on the photo of Ace Ventura, or any other photo supplied by a customer, will depend upon what rights your customer has to the original photo, and what your customer does with the final product. Obviously, both of these factors are outside your control. However, the good news is, with appropriate contract language you would be an “innocent” infringer, and thus your exposure is relatively low.

1. Your potential liability depends upon your customer’s use

The intellectual property rights involved are copyright, and the rights of publicity and privacy.

Copyright: When you create the animated character based on a photograph, you are making a copy of that photograph. Most likely, you are also adding your own copyrightable authorship to that photograph (by adding artistic elements to enable the facial animation). So you are correct, in that case you are making what’s known as a “derivative work” under copyright law. (See Legalities 14 for more on derivative works.) Generally, any unauthorized copy of a photograph, including a derivative work, is a copyright infringement unless it is used in a way that qualifies as “fair use.”  Whether a particular use qualifies as “fair use” depends on several factors. See Legalities 5. Parody is a classic example of fair use. On the other hand, a purely commercial use of an image is generally infringing.

Rights of privacy and publicity: Photographs of people also involve the rights of privacy and publicity of the people depicted. These rights may be violated under certain circumstances. See Legalities 7 and 8. Generally, publicity rights are violated when an image is used commercially. On the other hand, there is no violation when the use is “transformative.” When you create the animated character, you are participating in the process that culminates in a use of that person’s image. However, whether you are ultimately liable will again depend upon what your customer does with the character.

Liability for unauthorized use: This is a relatively new technology, and there is no case law that I know of that addresses your potential liability in this specific situation. Arguably, your own “use” of the photograph is commercial, because you are charging a fee to create it. However, I think the better argument is that your customer’s ultimate use of the character will determine whether your participation is infringing. This would be analogous to the way the law treats website hosts, or other publishers of potentially infringing materials. They will be liable if the material they publish does not qualify as fair use.

For the purposes of this discussion, the concepts of “fair use” under copyright law and “transformative use” under the law of publicity rights are essentially the same. (Rights of privacy have different rules. See Legalities 7 and 8.) If your customer uses the Ace Ventura animated character that you created to mock the movie or Jim Carrey, that would qualify as parody and transformative use. See, e.g ., for good examples of classic parody. Or if the character pops up on his email messages saying “Allrighty, then,” that’s probably a non-commercial use. On the other hand, if he uses the character on a website to sell pet food, that would be a purely commercial use, and it would therefore be copyright infringement and a violation of Carrey’s rights of publicity. Also if your customer resells the character to others, that would be a commercial use.

2. Your can limit your exposure as an innocent infringer

Work made for hire: Whether your work was specially commissioned or done under a “work made for hire” contract doesn’t change your liability for participating in the potential infringement. “Work made for hire” simply means that your customer would own the copyright in the final animated character. (See Legalities #4 on works made for hire). However, liability for infringement isn’t equivalent to copyright ownership. Anyone involved in creating, displaying or distributing the infringement can be liable, whether or not they own copyright in the infringing work.

Warranties and indemnity: Even though the work for hire angle doesn’t help you, you can limit your risk through other contractual provisions. You are on the right track by suggesting that your contract should disclaim liability. While you can’t escape legal liability simply by disclaiming it, you can require a warranty of non-infringement from your customer, plus indemnity by the customer in the event someone makes an infringement claim. The warranty means that your customer promises you that he has the necessary permission or rights in the photograph to have the animated character made and to use it for his intended purpose. In other words, he is promising you that the animated character, and what he does with it, will not constitute infringement. You may also want your customer to warrant that the character will be used for purely personal purposes, and will not be sold to others.

The indemnity means that your customer will hire counsel to defend you and will pay all your legal costs in the event that you are named in an infringement lawsuit.

Unfortunately, indemnity is only as good as the customer’s actual ability to pay legal costs in case of an infringement claim. However, having the warranty clause gives you another important shield: it establishes you as an innocent infringer. Having made your customer promise that he has the necessary rights to make and use the animated character, you are entitled to rely on that promise. Thus you can assert a good faith belief that your work was not an infringement. (The only exception here would be if you actually knew that your customer intended to use the character for an infringement despite what he said in the contract.) 

Damages for innocent infringement: Innocent infringers are generally only liable for monetary judgment (or “damages”) in the amount of profit, if any, they made on the infringing work. In your case, that would be something less than $10. If a plaintiff seeks statutory damages under copyright law, the award would likely be the statutory minimum of $200 for innocent infringement.

Drafting the contract provisions: The photocopying business Kinko’s has a standard release form which they make all customers sign if they suspect that the material being copied might be copyrighted. This is the result of a major copyright infringement case which Kinko’s lost several years ago. The Kinko’s form is very comprehensive, and would be a good place to start in drafting appropriate language for your client contract. I would also strongly suggest that you have a lawyer review your draft before you start using it.

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Legalities is a service mark of Linda Joy Kattwinkel. © 2005 Linda Joy Kattwinkel. All Rights Reserved. The information in this column is provided to help you become familiar with legal issues that may affect graphic artists. Legal advice must be tailored to the specific circumstances of each case, and nothing provided here should be used as a substitute for advice of legal counsel.

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