A minimalist approach to implied terms in an advertising agreement for photographs

A minimalist approach to implied terms in an advertising agreement for photographs

What lessons can be learnt from the Intellectual, Property and Enterprise Court’s (IPEC) judgment in an action for breach of implied terms of a contract between an advertising agency and its former client?

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In Orvec International Ltd v Linfoots Ltd [2014] EWHC 1970 (IPEC), the claimant traded in textile products, such as pillows and blankets, which it sold to airlines for use by their passengers. The defendant advertising agency produced for the claimant, under contract, photographs of products the latter offered to the airlines. The defendant retained the copyright in the photographs and granted the claimant a licence in respect of them. The claimant brought a claim for breach of contract and passing off in respect of the use on the website of a Hong Kong company of some of the photographs. The IPEC, in dismissing claims, held that, the defendant had not breached any licence which might be implied into the contract. On the facts, the claimant had failed to establish its claim of passing off.

What was the factual background to the case?

Orvec supplied textile products, such as pillowcases and headrest covers, to airlines. Some of these products were manufactured by Orvec and some by a third party, Intex. Linfoots provided advertising and marketing services to Orvec. As part of these services, Linfoots created printed advertising material including photographs of products that Orvec offered to the airlines. Orvec featured these on its website and in its printed advertising.

The parties’ business dealings ended. Orvec paid for certain uses of some of the images from the collection of photographs. Linfoots subsequently supplied some of the images to Intex, now a competitor of Orvec.

What claims did Orvec make?

There were two key claims by Orvec:

  1. images supplied to Intex (created for Orvec) that appeared on Intex’s website, were supplied by Linfoots in breach of contract
  2. the appearance of the relevant images on Intex’s website gave rise to passing off (Intex was not a defendant so the cause of action was an allegation of Linfoots equipping with means and procuring passing off)

What was the issue on the terms agreed between the parties?

There was an express agreement between the parties by way of Linfoots’ standard terms and conditions which stated: ‘Copyright remains the property of the company unless otherwise assigned’.

It was agreed between the parties, that the terms and conditions contained an implied term that Orvec had a (copyright) licence to use the advertising material supplied by Linfoots.

On the extent of the licence, Orvec proposed that it had an exclusive worldwide perp

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