The Getty Images Settlement Demand Letter

Information Website

Talking Points

Last updated: 7/5/2010

This page focuses on creating and assembling a defense for yourself.

Recommended Book

A very good book that I recommend to people who are unfamiliar with how lawsuits and the court system work is Nolo Press' Represent Yourself in Court: How to Prepare & Try a Winning Case

Whether you are a plaintiff or defendant, this book is a great easy-to-read legal guide for those of you who want to self-represent your own case. It is also good for those who choose to work with an attorney like Oscar Michelen.

You will become more empowered by learning basic legal concepts, vocabulary, and procedures. You become a better and more capable defendant by becoming an informed defendant.

In life, you will likely encounter other legal disputes besides getting a Settlement Demand Letter. Why not start learning and becoming smarter now?

Federal Court Case Precedent Set by Masterfile Lawsuit

At long last, there is a representative case that has supported most of the arguments and points our website has argued. In the recent case, Masterfile Corporation v. Country Cycling & Hiking Tours By Brooks, Inc. Case #: 1:2006cv06363 (August 22, 2006 to February 22, 2008), Masterfile won the case but they did not get anything near what they argued for. On September 18, 2009, Attorney Oscar Michelen wrote a detailed analysis and overview of the case, the findings, and the final ruling. This is mandatory reading for anyone looking to defend themselves against Getty Images, Masterfile, or any other stock photo company!

Written Analysis by Attorney Oscar Michelen on September 18, 2009.

Just wanted to update everyone about a recent Federal case in a suit filed by Masterfile that at first seems like a legal victory for Masterfile (since they were awarded nearly $6,000 in damages) but which in fact vindicates the position we have been espousing on this website. This may get a little wordy and legalistic, but stick with it as it is important for those who are facing claims brought by Masterfile and Getty and others.

Facts of the Case

The case is called Masterfile Corporation v. Country Cycling & Hiking Tours By Brooks, Inc. (even the title is wordy). From now on in this post I will refer to Masterfile as "MF" and the Defendant as "CC" MF sued CC, a small bike touring business for having four MF images on its website without authorization. The images were on CC's website for over 3 years (which is the statute of limitations period under the Act anyway) CC got the usual letter demanding huge amounts including a warning that the infringer faced up to $150,000 in statutory penalties since MF had registered the images with the US Copyright Office. CC immediately removed the images from its website. Apparently the parties tried to settle pre-litigation, but they were too far apart. MF would not go below $5,880 and CC offered only "a nominal sum." So Masterfile filed a Federal Copyright Infringement claim in the Southern District of New York.

CC did not hire a lawyer, nor did it contest the lawsuit. MF entered what is called a default judgment, meaning they win automatically on this issue of liability (fault); however, you still have to prove your damages at a hearing, called an inquest. CC only sent in a letter explaining their circumstances (which will be discussed later). While this was not proper under the Federal Rules, the court accepted it since CC was pro se (unrepresented by counsel). MF filed affidavits and other documents seeking $5,600 in statutory damages per image. Not far from what it usually seeks in its demand letters, by the way. Let's analyze the court's decision written by Magistrate Judge Frank Maas.

Statutory Damages

The court conducted an analysis of MF's claim for statutory damages. Let me first remind everyone that one only gets these damages if the image was registered with the copyright office. While the court acknowledged that the Act allows up to $150,000 it quickly pointed out that the court has "broad discretion" in awarding these damages and that "Ultimately, the statutory damages should bear some relation to actual damages suffered." The court noted that MF admitted that its licensing fee for the images would have been $1,120.00 per year per image. It also pointed out that even in statutory damages cases, one factor the court shold consider is the defendant's "individual culpability" in the infringement. This is our first area of vindication since we have been arguing with MF and Getty ("G") that even though innocence is not a defense to infringement, courts will look at the defendant's culpability in assessing damages. MF and G refused to acknowledge this position - one point for our side!

The Court then went on to state that "There are several problems with MF's proposed statutory damages."

First problem: Since MF registered all four images at the same time in one compilation (as they always do - they never individually register images) this counts as ONE INFRINGEMENT!! The Court cited the "unambiguous language" of the Act which states that a compilation that contains separate and independent works of art counts as one work for infringement purposes. Another point for our side!! We have been trying to get MF to concede this point for nearly a year now and they have refused to acknowledge it essentially talking in double-speak and and claims of it being "a gray area." Well if it was gray before (it wasn't) it ain't gray now. To quote Judge Maas: "Therefore for purpose of calculating statutory damages, [CC] infringed only one work."

Second problem: CC used a professional web designer. The court stated that since CC did so, "it had no knowledge it was using copyrighted material." The court also noted that CC immediately removed the images from its website once it became aware of the issue. Judge Maas said that these two factors suggest "that any damages awarded should be at the low end of the spectrum." Another HUGE point for our side!!! (Notice that I add one exclamation point for each point in our favor as we go along so we can keep track) This really is very important for a number of reasons. We have always advised folks to immediately remove the images and that this will be looked on favorably by courts. Nearly all of our MF and G clients employed web designers or template companies to get their images for them and design their sites. The image companies have argued that this did not make them "innocent infringers" since they would still be liable for their "agents" acts. When I pointed out that these are not agents, but independent contractors who were paid for their services I was told that this made no difference. Oh well, now we know that it does.

Third Problem: The court found that CC is a small company with gross revenues of about $16,400 per year and that almost none of its business comes through its website. In fact, all of its income comes from three law firms that book cycling programs. (That apparently none of these firms were willing to help CC out with a little bit of free legal advice or representation is unfortunate, but anyway I digress). The court then stated that had CC known what the licensing fee was "it is highly unlikely that it would have spent $1,120 per year for a license, rather than looking to the public domain for artwork." This is another significant point for our side!!!! OK let me explain why this is so important to our position on G cases especially - All the images companies argue that their licensing scheme should be the basis for an "actual damages claim" My position has been that this is just the starting point because it was a 2001 case called Davis v. The Gap which established the notion that a plaintiff could get a "retroactive license fee" as "actual damages" but in that case the court also said that crafting too large a retroactive fee would not be correct since the infringer would not have likely paid that amount. So we have been arguing with G especially that this part of the Davis case envisions a negotiation between the plaintiff and defendant meaning that a court will look at the fee to see if the infringer would have paid that in the market place or gone elsewhere. This new MF case says exactly that!!

Fourth Problem: CC does not need to be deterred. The court noted that given the circumstances of this case (which by the way are nearly identical to the circumstances of all other cases) a high award is not necessary to deter CC from infringing anew nor is it necessary to further the goal of general deterrence of others. We have directly made this argument almost verbatim to the image companies and sometimes they have nearly laughed back at me asking "How could you say this would not have value as general deterrence" (only a lawyer could chuckle as they uttered that sentence by the way). Now they know how I can say it - cause a Federal Court just did! To quote the Harry Potter book series: One point for Gryffindor!!!!!

The court awarded $1,120.00 in statutory damages to MF because (1) CC was unaware it had infringed (2) It infringed only one work since all the images came from one compilation (3) It acted appropriately once it learned of the problem.

Wow - a Federal lawsuit over a $1,120.00 claim. I think had I represented CC I could have gotten this down even further by arguing to the court that MF's licensing scheme should just be the starting point and that the fair market value of a stock image is what should apply. Also, while the court briefly mentions the section in the Act that allows a court to reduce damages in cases of innocent infringement there is no discussion of applying it to this case even though the court found CC was an innocent infringer.

Legal Fees

The court then went on discuss legal fees. It is this exposure to potential legal fees that makes me strongly encourage my MF clients to reach a settlement with them. But even this section was good for our side. The court noted that an award of legal fees is "generally awarded to a prevailing plaintiff" in a copyright infringement case involving registered works (you can't get it in cases involving works that were not registered at the time of the infringement). The court also noted that MF should get legal fees because it had to file suit since CC only offered a "nominal sum" prior to litigation. Well - this is really good for us! Presumably if CC had offered something at or over the $1,120.00 MF ended up winning, then suit may not have been reasonable and fees would have been unjustified. We routinely advise offering more than $300 per image on MF claims so that had we represented CC we would have come in at or over the $1120 and likely avoided having any legal fees awarded. Another point!!!!!!

The court conducted an analysis of the the time spent and costs incurred and awarded $4,860.00 So MF's lawyers made over 4 times what MF did by bringing this case. You think this is going to be encouraging to MF? I hope they read this case carefully and be guided accordingly

Permanent Injunction

The court went on to address MF's request for a permanent injunction - a court order stopping CC from ever infringing MF's copyrights again. This should be a ground ball for MF right? WRONG! The court denied this routine request as CC's owners are semi-retired and immediately removed the images so that it is not likely that they would ever infringe in the future.

Conclusion

This case clearly establishes that our position is correct on so many key points from innocent infringement to value of damages to how courts will look upon small businesses caught in this trap. I only regret CC had not come to my firm first as we may have been able to reduce this judgment even further. In any event, I sincerely hope that the various image companies take this decision to heart and begin to realize that coming closer to our side of these issues will save them time and effort and that litigation (and therefore the threat of litigation) may not get them the great results they seek!

As a follow-up to Oscar's analysis and commentary, I want to add that common sense prevailed. What Masterfile was asking for was not reasonable and did not take into consideration the defendant's obvious position and intent that they were innocent infringers. I would also like to point out that this case took nearly 2 years to resolve when you take into account the time prior to the actual filing date.

These notable court documents (Adobe Acrobat PDF) are very good and informative reading. Although this was a Masterfile case, this can easily pertain to many Getty Images cases if they should ever want to take any cases to court.

Notable Court Documents for Masterfile Corporation v. Country Cycling & Hiking Tours By Brooks, Inc. Case #: 1:2006cv06363 (August 22, 2006 to February 22, 2008).

Chilling Effects Clearinghouse

According to their website, the Chilling Effects Clearinghouse is "a joint project of the Electronic Frontier Foundation and Harvard, Stanford, Berkeley, University of San Francisco, University of Maine, George Washington School of Law, and Santa Clara University School of Law clinics."

Essentially, they are acting as voluntary watchdogs to ensure that people have the freedom to communicate freely but responsibly. According to their observations, they see individuals and corporations using intellectual property, copyrights, and other related laws to silence online users.

This is actually a fascinating website that covers a variety of topics. I suggest anyone who wishes to protect their rights to free speech on the Internet to visit this website.

As it relates to Getty Images, these are links to commentary that you may want to familiarize with.

Are the Images Even Registered?

Getty Images is accusing hundreds, perhaps even thousands, of people of copyright infringement. I wonder how many of these images they are managing have ever been registered with the U.S. Copyright Office. If I am forced to defend myself, I know one of the first questions I will be asking is if the image was even registered to begin with. I would also want proof that Getty Images has the right to enforce the specific image in question.

There are indications that most, if not all, of the images Getty manages is NOT registered. If they have not been registered, Getty would only be entitled to actual damages, not statutory damages. This means they do not get attorney's fees or whatever extravagant number they dream up. They actually have to substantiate and prove the number they come up with.

Getty' Image's own website seems to imply that there are many photographers not registering their own photos.

Defense Against Public Embarassment

Some of you are going to be embarassed by receiving a Letter from Getty Images and don't want anyone to know. You might be concerned of harassing phone calls. Others of you are going to be embarassed for being stupid and being a victim of some scam artist or unscrupulous web graphic designers. Others think your professional reputation will be tarnished and your livelihood affected.

All of this might be true to some degree but I will tell you that most people are pretty forgiving of your mistakes and your ignorance. But you have to own up to them. You have to be willing to publicly say you were an idiot but now you know better.

If you were a scumbag and intentionally ripped of Getty Images or anyone else for that matter, you get what you deserve. But so many more of us really were in the dark and only now learning about the crooks we have dealt with.

It takes courage to put up with public embarrassment. Once it is out in the open, people will eventually care less about your mistakes. So, if Getty Images hints at exposing you for your "crimes", beat them to the punch as I did. I posted this incident on my blogs and explained how this all went down. So far, so good. I still have my friends and business. No one is running anywhere yet. Everyone agrees that the $1,300 settlement letter I got was insane and plain nuts.

Defense Against U.S. Collection Agencies

I have some first-hand knowledge about dealing with colleciton agencies. I have hired a few over the years in my Property Management business. The good ones know what they can and cannot do. And they generally follow the rules because they do not want to get into legal trouble or put out of business by violating the Fair Debt Collections Practices Act (FDCPA).

In 2007, I had to help put one crooked collections agency out of business. The business community literally rallied together along with help from local TV stations and we put them out of business. They totally ignored FDCPA which earned them some lawsuits and stealing from clients which got some police and TV attention on them.

I have heard reports that Getty Images will send people to collections agencies. There will be two types of collection agencies that might come calling. The crooked ones won't care about any rules. There will simply be a lot of yelling, cursing, screaming, and threats on their part. In those cases, you will want to make a recording of the phone conversations (if allowed by law). You can also inform them that you intend to record the conversation which means you are upfront and not doing it secretly. And let them do the talking. But they will likely not want to talk or will be on their best behavior if they know they are being recorded.

If they scream and curse threats into your answering machine and voice mail system. That will be evidence to turn those guys in. Actually, that could really work well to your advantage.

Now, if Getty Images uses a professional collections agency that follows the FDCPA rules, you will want to pay attention to the links I am posting up. This information will be extremely helpful in contesting the "debt" you allegedly owe to Getty Images.

 

Legal Representation Against Possible Lawsuit

Oscar MichelenI contacted Oscar Michelen, a highly-respected and successful New York Attorney with 20+ years experience and a Partner of Sandback and Michelen in New York.

I "discovered" Oscar on a Google search when he graciously provided some great advice on AVVO.com to a fellow Letter recipient in Houston, TX. He also posted some good comments on our Discussion Forum. It made a lot of sense to me. I am pleased to find that Oscar has an Excellent AVVO rating.

Independent of this website, Oscar has actually been following the Getty Images Settlement Letter phenomena on the Internet for awhile. He informed me that he has spent hours of his own time researching this.

In my phone conversation with Oscar, I found him to be amazingly insightful of this particular case. He has also been following the Corbis case. One of Oscar's passions, which he says his entire law firm has been founded upon, is to represent the underdog against "corporate bullies". Oscar does not like "corporate bullies". Oscar claims that in the legal and court system, with the right represenation, everyone is equal.

Oscar told me about the various cases he has taken on where his client was the "underdog" equivalent to a "corporate David" going up against a "corporate Goliath" and come out triumphant. As I interpret what he said, one reason for his success is that courts are fundamentally "reasonable" and have an inherent bias towards doing what is "right" which often goes against what "corporate bullies" do in their actions. And so, "corporate bullies" often do not like going to court against someone that is well represented. They tend to prey upon those that are legally ignorant, legally unaware, and easily intimidated.

Oscar shared with me that INTENT absolutely matters in a court case. Establishing and proving ACTUAL DAMAGES also matters. ECONOMIC FEASIBILITY is also an issue. How much does a "corporate bully" have to spend to establish, try, and win a case? If they win, how much would they win? And if they lost, what is the reputational fallout? These are all issues to consider.

New August 20, 2009 Informational Videos Posted!

  • Host Matthew Chan and Attorney Oscar Michelen explain the Defense Letter Program, its origin, effectiveness, and how clients use it as a defense and counterargument against the Getty Images Settlement Demand Letter campaign. (43-minutes)
  • Host Matthew Chan & Attorney Oscar Michelen discuss strategies of how you can defend yourself against Getty Images if you choose to represent yourself without an attorney.(19-minutes)
  • Host Matthew Chan & Attorney Oscar Michelen discuss the basics of copyright law. (28-minutes)

Attorney Oscar Michelen Shares March 2009 Updates in Phone Interview

Oscar MichelenOn July 25, 2008, New York Attorney Oscar Michelen agreed to a 1-hour interview to discuss Getty Images, the infamous Letter, and issues/distinctions that ever Letter Recipient needs to know. For the very first anywhere on the Internet, we are providing original audio content with Oscar's professional and legal opinion.

On October 14, 2008, Oscar provides an update of the latest developments, insights, and strategies relating to the Getty Images Demand Letter controversy.

On March 20, 2009, Oscar provides a 3rd update.

Do not assume what you know or what Getty Images says is correct until you have listened to these insightful phone interviews.

Do not take advice from amateur advice-givers who do not know copyright law, it's application in a court of law, or have never set foot in a courtroom.

You can listen to this informative July 2008 interview here. Because of the length of this phone interview, it is being provided here in 2-parts.

  • Oscar Michelen Phone Jul-2008 Interview - Part 1 (28-minute MP3 file)
  • Oscar Michelen Phone Jul-2008 Interview - Part 2 (25-minute MP3 file)
  • Only ELI eNews Subscribers have access to these audio files.

You can listen to the updated October 14, 2008 interview here. Because of the length of this phone interview, it is being provided here in 2-parts.

  • Oscar Michelen Phone Oct-2008 Interview - Part 1 (24-minute MP3 file)
  • Oscar Michelen Phone Oct-2008 Interview - Part 2 (15-minute MP3 file)
  • Only ELI eNews Subscribers have access to these audio files.

Listen to the third update from the March 20, 2009 interview here. Because of the length of this phone interview, it is being provided here in 2-parts.

  • Oscar Michelen Phone Mar-2009 Interview - Part 1 (17-minute MP3 file)
  • Oscar Michelen Phone Mar-2009 Interview - Part 2 (15-minute MP3 file)
  • Only ELI eNews Subscribers have access to these audio files.

Subscribe to ELI News & Updates (Free!)
Name:
Email:
We value your privacy and we hate spam. Submit your email address with confidence. Your email address will never be sold, exchanged, or shown to anyone outside of our firm.

Getty Prefers to Settle with Photographers and Filmmakers on Infringement Claims

According to Getty Images Inc, Quarter 1-2008, Form 10-Q filing with the SEC under the Legal Proceedings section on page 23, they state the following:

"We have been, and may continue to be, subject to legal claims from time to time in the ordinary course of our business, including those related to alleged infringements of the intellectual property rights of third parties, such as the failure to secure model or property releases for imagery we license. Claims may also include those brought by photographers and filmmakers relating to or handling of images submitted to us or to the companies we have acquired. We have accrued a liability for the anticipated costs of settling such claims for which we believe a loss is probable."

It appears that are on the receving end of legal threats of photographers and filmakers. They prefer to settle those claims where they believe a loss is probable? Is that why they prefer to settle so quickly with me and other letter receivers?

In late 2007, Getty Images stated they felt there would be no material adverse effect on their consolidated financial position. However, in 2008, Getty no longer states this. In fact, they have anticipated costs for settling claims they do not believe they can win.

According to Getty Images Inc, Quarter 3-2007, Form 10-Q filing with the SEC under the Legal Proceedings section on page 23, they state the following:

"We have been, and may continue to be, subject to legal claims from time to time in the ordinary course of our business, including those related to alleged infringements of the intellectual property rights of third parties, such as the failure to secure model or property releases for imagery we license. Claims may also include those brought by photographers and filmmakers relating to our handling of images submitted to us or to the companies we have acquired. We have accrued a liability for the anticipated costs of settling claims for which we believe a loss is probable. There are no pending legal proceedings to which we are a party or to which any of our property is subject that, either individually or in the aggregate, we believe are expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows."

According to Getty Images Inc, Quarter 2-2007, Form 10-Q filing with the SEC under the Legal Proceedings section, there are no statements regarding possible infringements.

Their legal standing appears to have materially changed from 2007 to 2008. In fact, in cases where Getty expects to lose, they prefer to settle. Does this sound familiar?

Known Members of the Getty Images License Compliance Group

Readers of this website have provided additional names of the Getty Images License Compliance Group. To date, known names of members of this group are:

  • Lisa Sawaya Willmer - Director, Corporate Counsel
  • Chloe Surdyk
  • Andrew Joslyn
  • Ivette Johnson
  • Enjay Santos
  • Sam Brown
  • Lauren Kingston
  • Douglas J. Bieker
  • Kate Gardner - Information provided by LinkedIn.

GettyImages.com provides a list of Corporate Officers on their website. Without further substantiation, my educated guess is that License Compliance and other legal matters would fall under the direct jurisdiction of John Lapham, Senior Vice-President / General Counsel.

Getty Images Hires College Interns for License Compliance Group

For months, I have suspected that line members of the Getty Images License Compliance Group skewed young and were individuals who were not "streetwise" or "courtwise" legal professionals. It did not take me long to figure out by their written responses that the line workers preach the corporate line and have little insights of what actually can happen in an actual court of law with real people and real judges. It doesn't matter what you say to defend yourself, they have a textbook response. I also surmise most have never been actively involved as principals in any court case of any significance.

I have discovered a work study job description document on the University of Washington website that outlines Getty Images actively seeks legal interns to work in the License Compliance Group at a pay rate of $15.00/hour reporting to Lisa Willmer. When you view this document, please note what has been highlighted.

Look at the qualifications they are asking for. They want someone in law school who is a quick learner, a good writer, and a positive attitude. These Getty Images legal interns do not know what they are getting themselves into by becoming line employees entering the fight. I will not get into specifics but the things I have found in MySpace and Facebook does not bode well for many on their team.

For $15.00/hour, these Getty Images legal interns have the opportunity to join the rest of us in this negative and unpleasant controversy and have their personal names preserved in the Google and Yahoo search engines. If these interns have any smarts, they will have researched what Getty Images is all about BEFORE they get hired.

It will not surprise me if the turnover rate in the Getty Images License Compliance Group accelerates over time. I have gotten indications that some members of the team do not like the exposure this website is bringing to them. I think some of them know that for $15.00/hour, it is not worth some of the unintended grief being brought to them.

Can you imagine being a young, 20-something Getty Images legal intern and receiving the scorn of so many in the Internet community? I personally would not want that all that grief for $15.00/hour.

Who is Lisa Sawaya Willmer?

Director of Corporate Counsel, Lisa Sawaya Willmer recently issued a written response to one of Attorney Oscar Michelen's client letters. Because of her higher corporate position, we did a Google and Yahoo search on her.

According to FindLaw.com, Lisa went to University of Geogia School of Law in Athens, Georgia until 1998 where she got her J.D. She also attended University of Philadelphia, PA and got her B.A. degree. She was admitted to the Washington State Bar in 2001.

She was admitted to the Hawaii State bar in May 1999, JD # 7232. It appears she is no longer authorized to practice law in Hawaii.

According to the ACLU, Lisa worked for the law firm of Perkins Coie in September 2001.

In 2004, WorldBank.org states she worked in the Computer Crime and Intellectual Property Section of the U.S. Dept. of Justice.

According to Professor Mark Vinet's Entertainment Industry Blog, Lisa worked for Microsoft as an anti-piracy attorney in April 2006. She was quoted in the article.

There is obviously more to Lisa's career than can be found but these are her career highlights as reported on the Internet. Taken as a whole, she has always been a corporate attorney which means she has always taken the corporate perspective. I am not optimistic she can view the perspective from the "other side".

Based on loose calculations, I estimate Lisa Sawaya Willmer to be in her mid-to-late 30's with approximately 7 years of legal experience. In my view, definitely more experienced than any newbie attorney but not a heavy-hitter when compared to Attorney Oscar Michelen. Nevertheless, she does have the resources of Getty Images behind her.

Show Your Support: A PayPal Donation

The extensive time and hard work put into this website has been entirely voluntary. The information I have diligently researched, gathered, and openly shared is to assist the ever-growing community of Getty Extortion Letter recipients. To date, this website continues to be a free service I have personally funded.

ExtortionLetterInfo.com has become the definitive informational website in the U.S. to combat Getty's extortionistic letter practices.

At the suggestion of one our enthusiastic supporters, I have set up a PayPal Donation Button for those of you who wish to show your support by contributing and assisting our ongoing cause to fight the Getty Images Extortion Letters.

Help our cause by supporting the ongoing work and updates to this website by making a donation.

I recommend a small donation of $10.00 to $15.00 if you have found useful and valuable information that assisted you in defending yourself against Getty Images. You may donate as little as $1.00 or as high as $100.00. You may donate as frequently or as infrequently as your prefer. But just realize this is an ongoing fight. I need ongoing community support to continue the work on this website.

Thank you for your continued enthusiasm and support in our cause.

  Sincerely,

Matthew Chan

Share Your Information and Responses On Our Online Discussion Forum!

Send email to:

© 2008-2009 AguaSpace LLC. All Rights Reserved. This website is owned & operated by AguaSpace LLC.