An advertising agency spends years creating work for its client and then, at some point, the relationship ends. Does the ad agency have the right to display the work that it did for its former client on its website without the client's permission, in order to help generate new business? That's the issue that's being fought about right now in a lawsuit in federal court in Texas.
As part of a messy end to a decades-long relationship, the National Rifle Association sued its former ad agency Ackerman McQueen for continuing to display the work that the agency did for the NRA, even though their relationship had ended. The NRA asserted a variety of claims, including false association under the Lanham Act and copyright infringement.
In a recent decision, the court considered the ad agency's motion to dismiss some of the NRA's claims. In this post, I'm going to focus on how the court addressed the Lanham Act and copyright infringement claims.
Section 43(a)(1)(A) of the Lanham Act prohibits the use of words, symbols, and false or misleading statements by a person in a manner that "is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person . . . ."
The NRA's argument here was because Ackerman McQueen continued to use the NRA's name and advertising on its website after the relationship had ended, it provides "a strong inference that wrongly suggests to the public -- and creates consumer and customer confusion -- that the NRA presently endorses the services that AMc provides and that the NRA is currently AMc's client."
The ad agency argued that the Lanham Act claim should be dismissed because, among other things, every statement relating to the NRA on its website was factually accurate and not misleading. The agency also pointed to the fact that, after the lawsuit was filed, it changed references to the NRA to say, "National Rifle Association (Legacy)" to make it clear that the NRA is a former client.
The court refused to dismiss the claim, holding that it couldn't decide, at this preliminary stage of the proceedings, whether Ackerman McQueen's use of the NRA work and name on its website was misleading. The court said that the issue is "a fact-specific inquiry best left for decision after discovery."
The NRA also sued Ackerman McQueen for copyright infringement, based on the use of the NRA's advertising on the ad agency's website without permission.
The court didn't get to the merits of this issue, however, and instead dismissed the claim on technical grounds. In order to sue for copyright infringement, a copyright owner must first register its copyright, which the NRA had failed to do. The court wrote, "The court concludes that the NRA's copyright claim must be dismissed due to the NRA's failure to obtain registration of its copyrights prior to filing suit."
When an advertising agency's relationship with a client ends, what are some of the key issues that the ad agency should consider when deciding whether to post its former client's work on its website?
- Do you have permission from the client to display the work? Consider getting permission at the beginning of the relationship, in the master services agreement, or at the end of the relationship, as you're working out the termination details. If you have permission, that certainly avoids a dispute about any unauthorized use of the work.
- Similarly, you should also consider whether your contract with your client expressly prohibits the ad agency from using the client's work or the client's trademarks without permission.
- If you're considering whether it's appropriate to use the work without getting the former client's permission, when you display the work on your website, are you making it clear that it's a former client? Will prospective clients be confused about what your current relationship is with the former client? Have you also considered whether using the work will infringe the client's copyright or other rights in the materials? And, putting aside the legal issues, have you considered what the client's expectations are, in light of past practice and how the relationship ended?
- Have you also considered whether any third party rights may be implicated in the use of the work? For example, have you considered what rights may need to be obtained for footage, photography, music, and talent? Have you considered any applicable union issues?
While this lawsuit raises many more questions than it answers, it certainly highlights some important issues for advertising agencies to consider when deciding whether to post client work on the ad agency's website.
National Rifle Association of America v. Ackerman McQueen, 2020 WL 5526548 (N.D. Texas 2020).