“Should we just rip it up?”
Business owners have grown numb to scammy trademark “invoices” and emailed threats of domain infringement from overseas. But when it comes to claims of copyright infringement, even letters that look phishy often stem from actual, albeit de minimis, innocent acts which technically may infringe. These innocently infringing acts (we will call them “II Claims”) involve content (usually electronic, like photos) owned by others, often found on “free” image websites.
In the last year, TMF has observed a huge uptick in II Claims against its clients (fueled by advances in automated online image recognition technology combined with increased bullying) and we have helped settle many such disputes. To be clear, not all claims of infringement constitute “trolling,” and TMF aggressively pursues substantive infringement on behalf of its clients.
Typical II Claim Fact Patterns:
- A designer for a snack food innovator incorporates what it believes is a free “Creative Commons” image on the back panel of a package without noticing that the license prohibited adaptation.
- A summer intern pulls photos from a Google image search to use in mockups for company’s social media campaign. Before launch, the company pays licenses fees for commercial use, however, due to an intern error, one unlicensed photo from the original mockup falls through the cracks and ends up on Facebook. Once discovered, the post is taken down, but remains available in cached searches.
- A consulting firm hosts a charitable event and designed its announcement with what it understood to be “free” wallpaper images of nature, and invitation can still be found on their blog archive years later.
- A volunteer for-profit seeking to promote its community efforts produces a video including a short clip of a popular song in the background to underscore a theme about helping the less fortunate.
- A contributor to an ad-supported community newspaper submits a heartwarming, first-hand fire rescue account with an accompanying photo that is similar to one the contributor actually shot. It was, in fact, found online (at a higher resolution) by the contributor, and the newspaper reviews, crops, and publishes it, unaware. (Note: a more passive platform which publishes content without review may be eligible for a “safe harbor” under the Digital Millennium Copyright Act (DMCA).)
In each of these cases, the well-intentioned client (who likely would happily have spent a few bucks to license an image at the actual market rate) technically infringed on third party intellectual property rights.
When this happens, we start by applying “Fair Use” – a balancing test that looks at the particular facts at hand to determine if a sufficient defense to infringement applies. There’s no bright line rule, or complete defense for nonprofit or academic use.
Instead, we consider factors such as:
- If the use was beneficial to society.
- How much of the work was actually used.
- How much the market for the image was impacted.
- How much the work is transformed from the original (something that’s become even harder to prove in light of some recent cases, including surprising new Fair Use setbacks to Andy Warhol’s iconic works).
In many II Claim cases, it’s even harder to rely on Fair Use, because the uses were arguably “commercial” (or indirectly supporting commercial activity), and the photo could have been licensed through a stock website like Getty or istockphoto.)
Fortunately, that’s not the end of the analysis when faced with a five-figure shakedown for a single use. Though it’s true that an owner can demand up to $30,000 for a work (or $150,000 if they have reason to believe the infringement was intentional), these statutory damage figures vastly overstate typical II Claim rulings.
First, to even be eligible for such amounts, the work must be *timely* registered at the U.S. Copyright Office, generally before the alleged infringement occurred. TMF has observed that clients often receive letters which mislead the recipient as to a work’s registration status and use scare tactics to extract quick payment. As such, it is important to closely dissect the facts before engaging in settlement discussions.
Any image can form the basis of a valid claim, but one not timely registered at the Copyright Office may only be eligible for “actual damages,” broadly defined to include whatever profits could be attributed to the use.
Even where a potential plaintiff knows that actual damages would be tiny (or, in the case of a registered use, that a court would recognize accidental, innocent circumstances and only award a few hundred dollars) the threat (and potential cost) of litigation is often enough to extract (extort) a much higher figure from the innocent user.
The rise of aggressive copyright “mills” firms in the business of sniffing for online use and sending out many threatening (hasty, often typo-laden) demand letters has increased the chance that a suit will actually be filed. (In fact, some suspect there may even be a sneaky connection between some “free” image sites and copyright trolls.) Though it has never been a good idea to use images without permission, it is now riskier than ever.
TMF takeaways to consider:
- Though IP owners receive a lot of spam, be aware of these legitimate nuisance claims.
- Proactively audit (or have an attorney audit) your public-facing content to maximize compliance.
- Draft content and permission policies and ensure that all employees, contractors, and interns are properly informed.
- Beware of “free” download sites and carefully scrutinize even Creative Commons licensed images for specific rules.
- Promptly take down content when ownership or proper license cannot be confirmed.
- IP ownership always defaults to contractors, so written agreements (even retroactive) should be put in place before problems arise.
- Be aware that issues go beyond copyright, including trademark rights of brands and publicity rights of people in photos.
- The DMCA safe harbor for content posted by third parties is limited, but useful for some platforms.