Production Companies and Legal Liability: What Brands Must Know

Hiring a production company feels like the safe move. They handle the creative, they source the music, they manage the shoot — and if something goes wrong, that’s on them, right?

Not quite. When it comes to copyright liability, the contract you signed with your production partner offers far less protection than most brands assume.

You Can Still Be Sued — Directly

Copyright infringement is a strict liability offense. That means intent is irrelevant. It doesn’t matter if you didn’t know the music was unlicensed, or if you paid someone else to handle clearances. If your brand’s name is on the content and you’re distributing it, you’re exposed.

Your liability can take three forms:

• Direct infringement — your company is displaying or distributing the unauthorised work
• Vicarious liability — you had oversight of the production and stood to benefit financially from the content
• Contributory infringement — you provided the platform or means for infringement to occur (posting it on your corporate YouTube channel, for example)

Why Rights Holders Target Brands, Not Just Producers

Major rights holders — Universal, Sony, music publishers — almost always pursue both the production company and the brand. The reason is straightforward: brands are the “deep pocket.”

Small production boutiques often have limited assets. Brands don’t. Suing the brand creates immediate pressure, and under joint and several liability, a court can hold both parties responsible for 100% of damages. The rights holder doesn’t care who pays — only that they get paid.

The trap is simple: the label wins $500,000. Your production company has $10,000 in the bank. You pay the full $500,000. Your only recourse is to sue a company that may already be heading toward insolvency.

What Your Indemnity Clause Actually Does (And Doesn’t)

Your contract almost certainly contains an indemnity clause. It’s useful — but it’s not a shield.

What it does: it gives you the right to demand your production company covers your legal defence costs, and to recover any damages you end up paying.

What it doesn’t do: prevent the rights holder from naming you in the lawsuit, keep your brand out of public court filings, or stop an immediate takedown of your content.

And critically — an indemnity clause is only as valuable as the production company’s bank account. If they go under, that contractual right to be repaid becomes worthless.

The Case Law Makes This Clear

These aren’t hypothetical scenarios. Recent cases show exactly how this plays out:

Sony Music v. Marriott (2024): Sony sued Marriott over hundreds of unlicensed tracks used in social media videos — many produced by external partners. The court’s position was clear: as the brand benefiting from the content, Marriott was the target. Potential exposure reached $139 million before a private settlement was reached.

Sony Music v. OFRA Cosmetics (2023): Sony sued the beauty brand over unlicensed music in more than 329 social media videos — including content created by OFRA’s own influencer partners. OFRA’s defence was undermined by the fact that its affiliate contracts gave it the right to review, approve, and terminate influencers for IP violations. The court’s position: if you have the power to control it and financially benefit from it, you own the liability. Potential damages approached $50 million.

NBA Team Suits (2024–2025): Major publishers sued 14 NBA teams over unlicensed music in social media clips — many produced by third-party agencies using platform music libraries. The “everyone else is doing it” defence didn’t hold. The teams faced statutory damages of up to $150,000 per track.

The Takeaway

A production contract is a mechanism for financial recovery after the damage is done. It is not a preventative measure. By the time you’re triggering indemnity clauses, you’re already in litigation — absorbing legal fees, reputational risk, and potential content takedowns.

The only reliable protection is a proactive one. A creative compliance platform like Medialake gives you end-to-end visibility across your content — surfacing both historic and new assets, verifying that licences are still active, and monitoring every outbound channel. From your DAM to distribution, nothing slips through the cracks.

Waiting until a rights holder files suit to find out what’s in your library isn’t a strategy. Knowing before you publish is.