Let's say you’ve granted, and been paid for, a license for one of your images to be used in a company’s promotional brochure for one year. Do you have a duty to investigate whether the company is still using your image after the term expires? Subsequently, you learn that the company, in fact, continued using the image beyond the first year. If you then wait several years before bringing a copyright infringement action, will you still be able to prosecute your claim?
As a matter of good business practice, you should try to investigate whether your licensees are exceeding the terms of your licenses. This is especially true for businesses who are not accustomed to the licensing industry and who have a tendency to “forget” that copyright licenses, like all good things, must pass. However, as a legal matter, you generally have a duty to investigate whether the licensee continued to use the work after the term expired or otherwise exceeded the scope of the license. Although courts have in some circumstances imposed this duty on licensors, copyright owners as a general matter do not have “a never ending obligation to discover whether anyone to whom [it] ever supplied [its work] would copy it. The Copyright Act does not recognize such an obligation." MacLean v. Mercer-Meidinger-Hansen, Inc., 952 F.2d 769, 780 (3d Cir. 1991). This is good news, because it would add a tremendous expense if copyright owners were required to always actively police their licensees for unpermitted uses.
However, once a copyright owner learns of an infringement, it is important to act quickly. If you do not, you may well be “estopped” -- or prevented from bringing a claim -- pursuant to the doctrine of “laches.” The key question is whether you continued to permit the infringement even after you had knowledge of the unlawful use. In the case of Silva v. MacLaine, 697 F. Supp. 1423 (E.D. Mich 1988), for example, the plaintiff was estopped from bringing a copyright infringement claim involving plaintiff’s copyrighted material allegedly used in defendant’s book. Because plaintiff reviewed defendant’s manuscript in 1981, received an autographed copy of the book in 1983, and was later informed of a television series made from the book – and never objected – the court found that plaintiff was estopped from bringing a claim. If the defendant incurs great expense in producing, printing or distributing the copyrighted material, it will be even harder to stop a use after having knowledge of the infringement.
As a matter of good business practice, you should make sure your licensees do not exceed the scope of their licenses. As matter of good legal practice, however, you must act on an infringement as soon as you learn about it, or you may lose your rights.
