By Pavel Kolmogorov, Esq. – Business & Intellectual Property Litigation Attorney
Last updated: March 2026

Disclaimer: This case study is for informational purposes only. It is based on a composite of matters handled by the firm, with facts and details modified to protect confidentiality. Past results do not guarantee or predict similar outcomes in any other case. Every matter depends on its own unique facts, law, and circumstances.

Background

A California marketing and design agency (“the Agency”) produced digital ad campaigns and website content for small and mid‑sized businesses. Over several years, the Agency built a portfolio of visual assets—graphics, layouts, and copy—that it created under a mix of flat‑fee and retainer arrangements.

One of the Agency's former clients (“the Client”) stopped using its services but continued to use and modify several of the Agency's original graphics and layouts:

• The graphics appeared on the Client's new website, managed by a different vendor.

• The images were included in new social media ads the Agency had never approved or licensed.

• The Client had removed or altered the Agency's attribution/watermarks on some of the original designs.

The Agency believed this exceeded what had been agreed in their original services contract. After attempts to resolve the issue informally went nowhere, the Client hired a lawyer and accused the Agency of trying to “hold their website hostage.”

The Agency retained Kolmogorov Law to evaluate potential copyright infringement claims, assess the risks of counterclaims, and help chart a path forward under California and federal law.

Key Legal Issues

Our initial assessment focused on three main questions:

1. Ownership and scope of rights

   • Who owned the copyrights in the graphics and layouts?

   • Did the original contract make the work a “work made for hire,” or did the Agency retain ownership with a license to the Client?

   • Were any rights assigned in writing, or were there only general statements about “owning the website”?

2. Scope of the Client's license

   • Even if the Agency retained ownership, what license did the Client have?

   • Did the contract limit use to a particular website or campaign, or was it broader (e.g., “perpetual, non‑exclusive use”)?

   • Did the Client's new uses (new websites, new campaigns, modified graphics) exceed the license?

3. Remedies and risk allocation

   • What potential remedies existed (injunctive relief, actual damages, statutory damages if registered, attorney's fees)?

   • Did the Client have any plausible counterclaims (e.g., breach of contract, interference with business relationships, or unfair competition)?

   • Was litigation likely to be cost‑effective compared to a negotiated resolution?

We also evaluated timing and registration issues—whether any of the relevant works had been registered with the U.S. Copyright Office and, if not, whether registration should be pursued.

Our Approach as Intellectual Property Counsel

As the Agency's copyright and business litigation counsel, we focused on four parallel tracks:

1. Contract and copyright chain‑of‑title review

We began with the paperwork:

• The original services agreement and any change orders or SOWs

• Email correspondence about ownership, licensing, and “handing off” files

• Invoices and payment records for the disputed work

We compared the contract language with industry norms and relevant provisions of U.S. copyright law, paying particular attention to:

• Whether the agreement clearly assigned copyrights or was silent on ownership

• Whether there was any valid “work made for hire” clause

• How the contract described ongoing rights after termination of services

This allowed us to form a clear view of who likely owned what—and how a court would likely see it.

2. Mapping the alleged infringement

We then worked with the Agency to:

• Identify exactly which graphics and layouts were at issue

• Document where and how the Client was currently using those works (screenshots, URLs, social media ads, archived pages)

• Compare the current uses to the original scope of work and any license language

We created a side‑by‑side chart matching each work to its contractual basis, ownership status, and current use—critical if litigation became necessary.

3. Evaluating remedies and risk

We discussed realistic outcomes with the Agency, including:

• Best‑case, worst‑case, and likely‑case scenarios in a copyright lawsuit

• The role of registration: which works were registered and which might be registered now

• The Client's ability to pay, and whether any counterclaims could create significant exposure

This candid risk assessment helped the Agency decide that, while it wanted its rights respected, it did not want to jeopardize ongoing industry relationships or spend disproportionate sums on litigation.

4. Strategic negotiation with litigation readiness

We then sent a detailed letter to the Client's counsel that:

• Explained the Agency's ownership and licensing position under the contract and copyright law

• Included examples of current uses that appeared to exceed any reasonable license

• Invited discussion of a business‑focused solution, including:

  • A paid license for continued use;

  • Removal or replacement of certain graphics; and

  • Mutual releases of claims once a resolution was reached

At the same time, we:

• Prepared initial pleadings and continued gathering evidence; and

• Advised the Agency on how to preserve documents and communications relevant to the dispute.

Outcome

After a series of discussions and a short, attorney‑facilitated meeting between the principals:

• The parties agreed that the Client would pay a negotiated license fee for ongoing use of specified graphics on its primary website and social media channels.

• Certain disputed images were removed or replaced within a defined transition period.

• The parties signed a written settlement and license agreement, clarifying:

  • Which works were being licensed;

  • Where and how they could be used; and

  • What would happen if the Client wanted additional uses in the future.

• Both sides provided mutual releases, and no lawsuit was filed.

The Agency maintained control over its broader portfolio, received compensation for past and future use, and preserved its reputation in the local business community.

Lessons for Businesses and Creative Agencies

While every case is different, this matter highlights several practical lessons for small and mid‑sized businesses in California:

1. Clarify ownership and licensing up front

   Written contracts should clearly address:

   • Who owns the underlying copyrights

   • Whether the work is a “work made for hire” or owned by the creator

   • The scope of any license (where, how long, and for what uses)

2. Document approvals and changes

   Email threads saying “can we keep using this?” or “please send us all the files” can later become part of the evidentiary record. Consistent documentation supports your position if a dispute arises.

3. Register key creative works

   For many businesses and agencies, it makes sense to register important works with the U.S. Copyright Office. Registration can affect the remedies available and strengthen your position in negotiations.

4. Consider business‑focused outcomes, not just legal “wins”

   In infringement disputes—especially with former clients or partners—it can be more valuable to end the conflict on clear, professional terms than to prolong a public fight.

5. Get legal advice early

   Early consultation with an intellectual property lawyer or business litigation attorney can help you avoid steps that weaken your position, preserve evidence, and spot options for resolution before positions harden.

Facing a Copyright or IP Dispute?

If your business or creative agency is dealing with a copyright infringement claim—either as the rights‑holder or the accused—you do not have to navigate it alone.

A business and intellectual property lawyer can:

• Review your contracts and creative assets

• Assess ownership and licensing rights

• Advise you on registration, enforcement, and defense strategies

• Help you pursue a business‑minded resolution or, where necessary, prepare for litigation

Related resources on copyright and IP for California businesses

If this case study raised questions about your own situation, you may find these resources helpful:

- Intellectual Property Lawyer in California  – Overview of how Kolmogorov Law helps protect copyrights, trademarks, and other IP for California businesses.  
- Copyright Registration: The Best Way to Protect Your Intellectual Property in California – Explains why and how to register copyrights and how registration affects enforcement options. 
- Business Litigation Lawyer in California  – How we approach contract, partnership, and other commercial disputes for companies statewide.  
- Small‑Business Disputes FAQ  – Common conflict patterns for small and mid‑sized businesses, including IP and client‑relationship problems.

Contact a California Intellectual Property & Business Litigation Lawyer

If your business or creative agency is dealing with a copyright infringement dispute or other intellectual property issue, you don't have to navigate it alone. Early legal advice can help you understand your rights, avoid costly missteps, and decide whether negotiation, licensing, or litigation makes the most sense.

At Kolmogorov Law, we represent California businesses in copyright, trademark, and other IP disputes as well as broader contract and partnership conflicts. We focus on practical, business‑minded solutions that protect your creative work and your company's bottom line.

Call (909) 235‑6116 or contact us online to schedule a consultation.