12 Jan

Chipotle’s $2.2 Billion Lawsuit, and 5 Ways You Can Avoid the Risk of Litigation


A California woman has filed a lawsuit against Chipotle Mexican Grill, its founder and CEO Steve Ells, and photographer Steve Adams in the amount of $2,237,633,000 for unauthorized use of her image in their advertising. Plaintiff Leah Caldwell was dining in a Chipotle in 2006 when Steve Adams took her photograph and approached her to sign a release. Caldwell declined, yet eight years later found the altered photograph with alcoholic beverage containers added to her table plastered across various stores in the chain.

While it is unclear whether Chipotle and Ells were aware that the photo they were using did not carry a proper talent release, the negative press and the legal battle will cost the company, regardless of the amount of the settlement.

Here are 5 things you can do to protect yourself against a lawsuit for unauthorized use of IP.

  1. Create a process for contracted content.Whether you are working with an ad agency or purchasing usage rights directly from an artist or distributor, you should have a process for documentation verification in place to ensure licensed content is free and clear of any encumbrances. Part of this process should include identifying all of the contractual parties involved for each asset, for example talent, photographer and licensed brands, and create a checklist to ensure each IP property has been properly cleared with all participating parties.
  2. Use a Digital Asset Manager (DAM).Housing all digital assets in a single, central system allows for better oversight, more control, and greater visibility into asset inventory. This gives you the ability to better use and reuse your investments.
  3. Create an enforceable compliance workflow.Having a gatekeeper that is responsible for verifying digital assets against legal contract terms and documenting restrictions helps ensure DAMs are loaded only with available assets.
  4. Link digital assets with contractual rights.Many organizations use the metadata fields in their DAMs to notate asset rights, but with the ever-growing complexity of usage terms, this is becoming less and less viable. A scalable system built specifically for rights management is advisable.
  5. Expose asset rights to creative teams. Make your creative teams more efficient and less reliant on business affairs by giving them rights information at their fingertips. Allow them to check real-time if an asset has the rights without having to call legal, track down the original purchaser, or sift through lengthy contracts. And often creative teams are vast and distributed – from internal marketing and advertising to contracted agencies. A solution like FADEL Rights Cloud gives you the ability to seamlessly integrate rights clearance with your DAM, and can also be used as a standalone system to allow internal marketing teams, other departments within your organization, advertising teams and ad agencies to check asset availability without having to purchase additional DAM licenses.
Categories associated with this post: Asset Rights Clearance, Rights Management
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Gregg Guest
Gregg Guest is responsible for driving FADEL’s IP Management product strategies and growing the firm’s intellectual property practices. Gregg is an experienced thought leader on the complex topic of intellectual property and licensing, having previously worked at Debevoise & Plimpton, a corporate law firm renowned for its Media and IP practice, and Marvel Entertainment, one of the leaders in character licensing and merchandising. Gregg also brings over fifteen years of experience in IT, including the management of a custom development team at Braveline Technology. Gregg received a BFA from New York University in Film/TV & Communications, and has won numerous awards for film making and screenwriting.

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