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Author Topic: "$1500" license for sale on other website for $20 (same image)  (Read 4225 times)

mom_and_pop

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"$1500" license for sale on other website for $20 (same image)
« on: December 31, 2010, 07:03:37 AM »
Thanks so much for posting this website and the information on it.  I have read through a lot of information and it is very helpful. Thanks!

I have three questions at the bottom of the post and before that give a background summary. Thanks for any comments/answers.

Background Summary:

1) Small mom & pop business which due to economy we are considering shutting down.  It is a side business which doesn't make much money and frequently loses money.

2) Received a letter from SS a few months ago regarding one small image on our website asking for roughly $1500.  Image had insignificant placement on a secondary webpage which has generated no business nor profits.  

3) Previously I was unfamiliar with how this (obtaining stock images) all worked, but have researched and I have found several similar images with perpetual licenses for sale for between $3 and $15 and some also on free sites.  I have found the exact same image with a rights managed license for sale on another company's website for less than $20 for a perpetual website license.  SS has the image on their website for licensing in amounts ranging from several hundred dollars to several thousand dollars depending on the particulars. (This pricing scheme on their website appears not to be actual pricing for those looking to purchase images on the web, due to the many other examples of low cost similar and identical images, but appears to be just another part of the extortion scheme)

4) Our website was developed a few years ago by a young man in his 20s who had started a web design company.  He said he only used images from free image sites or cheap image websites that he had the right to use on our website.  Based on all the low cost images I have seen available on some of these sites with my investigation, that seems quite plausible.  He gave us a signed invoice at the time saying that we had all the rights for the material on the website.

5) After receiving the letter, we took the image down, wrote SS telling them we had taken it down and explained that the web designer told us he had obtained the rights to use the images on our site and that he may have received the right to use the image from them previously or with one of their predecessors.

6) SS sent us another letter again asking for the same amount of money, they included a CD which they say has the image on it (which we haven't opened), and they sent us a copy of their copyright registration (it doesn't have the picture on it, but just lists the registration information)

7) The copyright registration shows SS as the owner of the copyright with the work as "for hire".  There are more than 100 images registered on the same registration.  It says the images were first published back in the 1990s, but the images weren't registered until much later, in the last couple of years, after our website had already been up for a while.

8) About a month ago we received a letter from an attorney to whom SS has referred the matter asking for payment and citing court cases and citing 17 U.S.C. § 504 and § 505 saying that they can get $750-$30000 in statutory damages and attorney fees on top of that.

9) We had not seen your site at that time and had sent the letters to a local attorney for review and asked for his opinion.  He is a general practitioner and we think he may not be up to speed on copyright matters.  He recommended since they might be able to get an award for attorney fees that we just pay the full amount they were asking for and then go after the web designer.  We felt we should negotiate.  We offered SS amounts between $300-$500 to settle which they rejected but they said they would settle for around $750.  We asked them to send the agreement.  We didn't like how the agreement was worded and we sent them a revised version of the agreement back.  They made a few more changes and sent it back to us.  We still don't like how it is worded and due to the holidays haven't had a chance to pursue further so that is where we stand currently.

10) Over the holidays I did a little research and read most of the copyright law on the copyright office website (link to copyright law, Title 17 U.S.C.) and also found your site and read several of the postings.  I was really intrigued when I read 17 U.S.C. § 412 and then read postings on your site.  Based on these, I think the advice to settle for such a high amount was maybe not so good.  If I understand correctly even though their registration was made a couple years ago, since their registration was made more than a decade after original publication listed on the registration and was made after our website went up with the image in question that § 412(2) would prevent them from obtaining statutory damages or attorney fees.

11) 17.U.S.C. § 412 says that "no award of statutory damages or of attorney’s fees, as provided by sections 504 and 505, shall be made for —
... (2) any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work. (emphasis added)

   - Even if the web designer didn't obtain a license as he claims, this § 412 seems to apply since the website with the image in question commenced after their first publication in the 1990s, but before the effective date of their registration with the copyright office according to the copy of the registration they sent me, and they didn't register within 3 months of the first publication (they waited more than a decade).  I don't even know if SS was the original copyright owner or if they were even the owners when my website designer says he obtained a license when our website commenced before they registered the copyright.


Questions:

1) Is it correct that even if the web designer's assertion that he obtained a license is incorrect that SS would only be able to obtain actual damages in this case per section 412(2) and not attorney fees (17 U.S.C. § 412)?

2) If there were liability, wouldn't actual damages be more along the lines of the $20 that the exact same image perpetual license is for sale for on another company's website since we have no profits from the webpage image to be factored in (due to 17 U.S.C. § 504(b) )?  (by the way, even though we don't intend to use it again, we went ahead and purchased the perpetual license for the image in question from the other company's website just so that in case the web designer's claim to have already obtained a license for the image was incorrect that copyright owners would not be withheld payment for a license fee)

3) If both answers are yes to these two questions, wouldn't it be better not to offer any settlement at all at this point?  This is because even if the web designer is incorrect about having obtained a license to use the image and there is liability, that any award would be for less than $100, or would even be $0 since we have now already paid (although after the fact) what is and what would have been the fair market value of the license fee and they would have to pay their own attorney fees.  This is also after them having rejected our offers of $300-$500 and we haven't agreed on wording of the $700+ agreement which we had been negotiating before understanding the complete magnitude and nature of this extortion scheme and before understanding the rights and remedies of the copyright law.

Any other comments or suggestions?

Thanks so much!

Oscar Michelen

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Re: \
« Reply #1 on: January 03, 2011, 12:12:03 AM »
Questions:

1) Is it correct that even if the web designer's assertion that he obtained a license is incorrect that SS would only be able to obtain actual damages in this case per section 412(2) and not attorney fees (17 U.S.C. § 412)? Yes, if the infringement occurred before registration of the images, SS could not get statutory damages and attorneys fees.

2) If there were liability, wouldn't actual damages be more along the lines of the $20 that the exact same image perpetual license is for sale for on another company's website since we have no profits from the webpage image to be factored in (due to 17 U.S.C. § 504(b) )? (by the way, even though we don't intend to use it again, we went ahead and purchased the perpetual license for the image in question from the other company's website just so that in case the web designer's claim to have already obtained a license for the image was incorrect that copyright owners would not be withheld payment for a license fee) While this issue has never been decided, we would argue that actual damages can only be the market value for the license - in this case around $20

3) If both answers are yes to these two questions, wouldn't it be better not to offer any settlement at all at this point? This is because even if the web designer is incorrect about having obtained a license to use the image and there is liability, that any award would be for less than $100, or would even be $0 since we have now already paid (although after the fact) what is and what would have been the fair market value of the license fee and they would have to pay their own attorney fees. This is also after them having rejected our offers of $300-$500 and we haven't agreed on wording of the $700+ agreement which we had been negotiating before understanding the complete magnitude and nature of this extortion scheme and before understanding the rights and remedies of the copyright law.  We generally don't recommend offering more than a minimal amount in single image cases against SS

Any other comments or suggestions? Remove the image permanently from your website Let me knwo if you want me to send a letter to Superstock on your behalf. you can email me at xxx

Thanks so much!

« Last Edit: February 29, 2012, 11:46:04 PM by Matthew Chan »

mom_and_pop

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Re: "$1500" license for sale on other website for $20 (same image)
« Reply #2 on: January 11, 2011, 07:27:23 PM »
Thank you.

By "a minimal amount in single image cases" do you mean something similar to the $20 of actual damages? Thanks.

Oscar Michelen

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Re: "$1500" license for sale on other website for $20 (same image)
« Reply #3 on: January 12, 2011, 05:23:07 PM »
Say around $100 unless they can prove registration

 

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