In negotiations is not the same as a signed agreement. Seems simple but his kind of thing happens a lot. People get excited. They want to tweet to use it or tweet it to the world. Sometimes, it’s no problem, the agreement gets signed and life goes on. Other times, it’s a different story as evidenced by a lawsuit filed by Sony against United Airlines, Inflight Productions and Rightscom.
According to the Hollywood Reporter, Rightscom, United’s intellectual property consultant contacted Sony Music to discuss a licensing agreement for Sony properties. Rightscom candidly explained that United was reproducing copyrighted material and that “it is going to be necessary for Inflight to contact the labels individually to put the necessary licenses in place.”
Negotiations began regarding licensing the works for use but all during the discussions, United was offering its customers the copyrighted entertainment with no definitive agreement in place. The inflight material included major performers such as Britney Spears, Carrie Underwood, and Justin Timberlake and Michael Jackson. Before negotiation has ended, Sony and various label subsidiaries sued United Airlines, Inflight Productions and Rightscom for copyright infringement.
Copyright infringement can be especially problematic because an infringement can occur with only one infraction. How many times it is used, doesn’t matter, how long the infringing work was used doesn’t matter, whether you knew it was an infringement doesn’t matter; the only thing that matters is that a copyrighted work was used without authorization (although those issues may have some effect on damage awards).
Since the works were copyrighted before the infringement, Sony can receive statutory damages as well as legal fee, which can be pretty high. The fact that they were in negotiation has no bearing on the infringement. Why Sony felt they had to sue instead of working out payment as part of the license agreement has yet to be revealed. Did United have an indication that there might be a lawsuit? Were negotiations going badly?
The moral of this story is; make sure your agreement is signed before taking any action or you might find yourself embroiled in a legal battle.