If company A pays company B to create an ad/logo/video/etc. and then uses it, what happens if company B used copyrighted material without obtaining the necessary permissions, unbeknown to company A? Is company A liable for that?

I assume they wouldn't be able to use the material after being informed of the infringement and presented proof of that. I'm asking about if they don't know about it.


Yes, company A is liable for that; ignorance is not a defence.

For this reason, a prudent company A would put an indemnification clause in their contract with company B so that if A is sues then company B pays. This is, of course, completely useless if company B is out of business at the time of the suit.

  • Actually, ignorance usually is a defence to criminal proceedings for copyright infringement (in places which have them). However, civil liability remains, which is usually the main concern. – sleske Jun 6 '16 at 9:24
  • @sleske the question is about liability which is usually about civil actions – Dale M Jun 6 '16 at 9:27
  • Well, I'm neither a native speaker nor a lawyer, but as far as I understand "liable"/"liability" is also used to include criminal matters (e.g, Google has almost 2 mio. hits for "criminal liability"). I just wanted to mention it for completeness' sake. – sleske Jun 6 '16 at 9:31
  • Just to add as a designer – Prudent design company B will put a clause in the contract making it clear they don't take any liability unless negligence can be proved. And they'll have insurance anyway; don't work with a design agency which doesn't have professional indemnity insurance. Company A should also have their own insurance. – Dan W Feb 8 '19 at 19:05

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