Years ago my partner licensed 3 of her paintings to a company to be published as posters, which she received initial royalties for, but 3 years ago the royalties stopped and we were told the company went out of business. Last week a friend spotted those 3 very distinct images re-worked into a large mural on the wall of a NYC cafe. Photos prove clear copyright infringement. My partner knew nothing about her art being used for murals, was never asked permission or paid anything for that use. Who can she sue for infringement - the muralist who copied the art, the cafe owner for unauthorized use of stolen images, the poster company who licensed the art (if proven they illegally sold or sub-licensed her images to the cafe or muralist) or could all three parties be held liable?
"or could all three parties be held liable?"
Yes, she has a case against all of them. If they cross-complain against each other for indemnity because of warranties they have for their transactions,m that's between them, but it sounds like all of them have committed infringement of your partner's paintings. She should see a copyright litigator ASAP.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
Copyright Infringement Attorney
It certainly sounds like she has a clear case against the artist. Whether she has a case against the cafe owner and the poster company will depend on the facts.
If the poster company improperly licensed the images, it will be liable for direct infringement. (It is not clear from your description whether the posters were ever in fact published. If they were and the artist copied the images from a poster without the involvement or knowledge of the poster company, it would not be liable in my opinion.)
The cafe owner may be liable for what is called "indirect infringement." There are two kinds: contributory infringement and vicarious infringement.
To be liable as a contributory infringer, generally a person must have had both (i) knowledge of the infringing activity and (ii) induced or materially contributed to the infringement in some way.
To be liable as a vicarious infringer, the person must have had (i) the right and ability to control the infringer's actions and (2) received a financial benefit or profit from the infringement.
Without further facts, it is impossible to know for sure whether these elements can be made out. It is very possible, but not certain, that they can.
The first thing that your friend should do is register the images involved with the United States Copyright Office, if she hasn't already done that. Registration is still a prerequisite to initiating suit, although the Supreme Court recently held (in the class action context) that a failure to register does not deprive a court of jurisdiction.
Registration is important for a second reason: Absent registration, she will not be able to recover statutory damages for any future infringements. (Statutory damages range from $ 750 to $30,000 per infringement; up to $ 150,000 in the case of a willful infringement.) She will be limited to an "actual damages" remedy.
If she hasn't already registered, she will likely be limited to an "actual damage" remedy here, but that may not be insignificant in this case. She should consult an IP attorney immediately so that she does not miss any deadlines. There is a 3 year statute of limitations (deadline) within which infringement claims must be brought. It is not clear whether any of her claims are already barred. Again, that will depend on the facts.
The answer is that you can sue all of the parties. Whether you can win against them is a matter of proof.
Although it SOUNDS like a "clear" case of infringement, it could be a fair use, if the mural is sufficiently transformative,(and other factors weigh in favor of fair use), but it's an evaluation that a lawyer would have to make before filing suit.
Intellectual Property Law Attorney
Your partner may have good copyright claims for direct, induced and vicarious infringement but I would need to know a lot more information before providing you with definitive legal advice. Most importantly, it is critical to review the written license agreement betwween your partner and you. Your belief was that the license agreement covered use of the paintings only in posters, but we need to check the exact language of the license agreement, because there may be arguments that the license extended to the creation of large murals (which might be considered posters). Also, it is critical to know whether the license was exclusive or non-exclusive---did your partner retain the right to license the pictures to others, or to use the pictures for other purposes. Further, we would need to trace the licensee that purportedly went out of business, and in so doing, determine whether the licensee may have validly assigned its rights under the license agreement to the artist who created the murals or the cafe which apparently induced the murals to be placed on its walls. It is quite possible that there was a valid assignment by the licensee to the artist or cafe owner (or that the cafe owner is the same corporate entity as the original licensee). Further, there is a significant question concerning the amount of royalties to which you would be entitled. Even if you can prove infringement, you also will have to establish either statutory or actual damages. Often, owners of copyrights assume that the damages are far greater than can actually be obtained in litigation. Before any attorney would litigate the case on your behalf, it would be necessary to investigate whether it makes economic sense to do so. Remember--statutory damages can be as little as $750 for each infringing work--which is barely enough to pay for an hour or two of lawyer time. The royalty due for one use of the pictures under the license agreement might be very low. Actual damages might be higher, but your partner needs to ask himself how he was actually damaged from display of the mural on the wall of the cafe? If the license was non-exclusive, did the placement of the mural on the wall detract from your partner's ability to sell copies of the pictures to other---perhaps the effect of the mural was to enhance the value of the original pictures and make it easier to license copies of them--in which event the damages might be zero. In short, while you may have viable copyright claims, you need to provide your lawyer with substantial additional information before he or she can reasoanbly advise you as to whether to pursue those claims.