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Author Topic: Fair Market Value of Images vs. Licensing Fees set by copyright holders  (Read 6443 times)

Matthew Chan

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An important case that supports ELI's position that copyright extortionists try to get away with using overly-inflated licensing fees that no ordinary person or small business would pay for an image is the copyright infringement case of "Davis v. The Gap".

http://scholar.google.com/scholar_case?case=10111059883446478989

It is very lengthy reading. However, the crux of this appeal is the Court's discussion on determining value of an infringement. An infringement does not automatically mean that an alleged infringer has to pay exorbitant licensing fees as set by companies such as Getty.  There are way too many low-priced stock photos which can be purchased for $50 or less.  Getty owns many of these low-priced websites themselves. By doing so, they actually help devalue their own holdings of their supposed high-valued images on the main Getty site.

The U.S. Court of Appeals, 2nd Circuit states in its ruling:

The question is not what the owner would have charged, but rather what is the fair market value. In order to make out his claim that he has suffered actual damage because of the infringer's failure to pay the fee, the owner must show that the thing taken had a fair market value. But if the plaintiff owner has done so, and the defendant is thus protected against an unrealistically exaggerated claim, we can see little reason not to consider the market value of the uncollected license fee as an element of "actual damages" under § 504(b).[5]

We recognize also that finding the fair market value of a reasonable license fee may involve some uncertainty. But that is not sufficient reason to refuse to consider this as an eligible measure of actual damages. Many of the accepted methods of calculating copyright damages require the court to make uncertain estimates in the realm of contrary to fact.



On the issue of "punitive damages":

As a general rule, punitive damages are not awarded in a statutory copyright infringement action. The purpose of punitive damages — to punish and prevent malicious conduct — is generally achieved under the Copyright Act through the provisions of 17 U.S.C. § 504(c)(2), which allow increases to an award of statutory damages in cases of willful infringement.


On "de minimis" infringements:

The de minimis doctrine essentially provides that where unauthorized copying is sufficiently trivial, "the law will not impose legal consequences."

The de minimis doctrine is rarely discussed in copyright opinions because suits are rarely brought over trivial instances of copying. Nonetheless, it is an important aspect of the law of copyright. Trivial copying is a significant part of modern life. Most honest citizens in the modern world frequently engage, without hesitation, in trivial copying that, but for the de minimis doctrine, would technically constitute a violation of law. We do not hesitate to make a photocopy of a letter from a friend to show to another friend, or of a favorite cartoon to post on the refrigerator. Parents in Central Park photograph their children perched on José de Creeft's Alice in Wonderland sculpture. We record television programs aired while we are out, so as to watch them at a more convenient hour. Waiters at a restaurant sing "Happy Birthday" at a patron's table. When we do such things, it is not that we are breaking the law but unlikely to be sued given the high cost of litigation. Because of the de minimis doctrine, in trivial instances of copying, we are in fact not breaking the law. If a copyright owner were to sue the makers of trivial copies, judgment would be for the defendants.


I'm a non-lawyer but not legally ignorant either. Under the 1st Amendment, I have the right to post facts & opinions using rhetorical hyperbole, colloquialisms, metaphors, parody, snark, or epithets. Under Section 230 of CDA, I'm only responsible for posts I write, not what others write.

stinger

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Nice find Matt.

Good information here for ELI readers and a blow to the likes of Getty Images and McCormack IP Law.

Mulligan

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Great find, Matt. Thanks for posting it.

Oscar Michelen

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In all my letters to Getty for the past 5 yrs or so I have prominently cited to Davis v. The Gap the case also notes that the court should imagine a transaction between the plaintiff and defendant and ask whether this defendant would have paid this amount for the license fee.  This case also supports the position that in lawsuits, defendants should ask for information of sales, records of payments, etc for the subject photo to see how much the plaintiff actually charged customers who opted to use the image. 

 

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