Can a design agency be held responsible for copyrights in the work they deliver?

My company is currently going through contract negotiations with a design agency who will do our corporate identity system.

The legal team in my company demands that there is a clause in the terms of agreement that gives the design agency responsibility of any breaches of copyright that the design may cause. Something the design agency won't agree with.

Although I can understand the legal team in my company wants to protect us against copyright breaches, it seems a bit over the top. No design agency would be able to totally guarantee that their design did not breach the copyright of some obscure design done by a different company.

First, the design company isn't using your Corporate Identity, your company will. Infringement occurs with both use and sale. You could both be held liable (your company for use, the designer for profiting off someone elses work), regardless of any agreement IF the work infringes upon a third party's creative or moral rights, etc. Your legal team's request is unfair and wouldn't be a valid defense against infringement (though it might allow your company to sue the designer to recoup potential damages, which might be legal though unethical if your usage caused the infringment).

"No design agency would be able to totally guarantee that their design did not breach the copyright of some obscure design done by a different company."

If they designed it and it is similar to someone elses, they should not be liable unless they attemped to make it so or represented it as such. You might still be required to start over with a new design if the design infringed on a trademark(servicemark) in your industry, however.

While I do not know the full details, I would probably not accept the clause either (I'm a writer/ producer/ copywriter/ editor, currently forming a new design/animation studio).

Here's an idea:

Insert a "Warranty of Originality" clause.
"The Developer warrants and represents that, to the best of his/her knowledge, the work assigned hereunder is original and has not been previously published or that consent to use has been obtained on an unlimited basis; that all work or portions thereof obtained through third parties is original or, if previously published, that consent to use has been obtained on an unlimited basis; that the Developer has full authority to make this agreement; and that the work does not contain any scandalous, libelous, or unlawful matter. This warranty does not extend to any uses that the Client or others may make of the Developr's product that may infringe on the rights of others. Client expressly agrees that it will hold the Developer harmless for all liability caused by the client's use of the developer's product to the extent such use infringes on the rights of others."
"The Handbook of Pricing and Ethical Guidelines", Graphic Artist Guild, p278 (Sample Contracts)

Your designer should agree to a "Warranty of Originality", it's a standard inclusion in many contracts of this type. If they belong to GAG, they also have license to use the above language in whole or part in thier contracts.

Corporate Identity is mainly covered under Trademark (Servicemark) law, not copyright law, btw.

Good lord, tell your legal people to figure out if the design "proof" doesn't breach anything themselves...if there's one thing design people hate it's having to do tons of legwork for corporate guys, or anybody for that matter. They'll probably work within their knowledge of other corporate identities and make something as original as they can. Designers don't make $50,000+ salaries. I certainly wouldn't agree to be held responsible for anything after any copyright process is finished...I've got other stuff to worry about aside from graphic design, like making sure I can pay my rent by the end of the month. The designer is showing you an idea, you have the final say if it's good and legal or not.

Yes, the design agency should accept such a clause. If they breach someone's design, they should pay for it. If they don't breach anyone's design on purpose, you/they may still get sued if something looks coincidentially similar. Of course, such a lawsuit would probably not be successful, but it would still be a hassle and expensive to defend. This seems fishy; I think you should look around for another agencies.

ask for the legal department of the design company--they are liable for security and it HAS to be written into the legal end of their company . Without it they should be avoided.

I'm with Jim on this question. As a designer myself for over two decades I am often asked to represent the originality of my work. I think the issue is with the way your clause is phrased rather than the concept of offering original work.

If your designer is unwilling to offer such a warrantee I'd recommend finding someone else too.

Anyway, best of luck to you... bad artists are easy to come by.... good ones are HARD TO FIND.

Best,

Adam Fiveson
5webdesign.com

Yes, you should make sure this is in the contract. Usually it's a clause like the design agency will guarantee the work to be original except in the case where external material is provided by the client (ex. pictures).

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