MasterFiles Recent Victory. (If You Want to Call It That)

[Greg Troy (KeepFighting)]

In October 2009 Masterfile filed suit in the United States District Court for the District of Utah, Central division against Martin and Laurie Gale for the use of 27 images on their website. The images remained on Mr. and Mrs. Gale's site for five years before they were noticed by Masterfile.

Looking at the initial complaint it appears to me that Masterfile claims that Mr. and Mrs. Gales use of the 27 images was a willful infringement and is seeking the maximum amount allowable in all categories. If you look at line 16 in the initial complaint Masterfile is seeking retroactive licensing fees totaling $73,830. They are asking for the maximum statutory damages under section 504(c) of $30,000 for each image for a total of $810,000, they are also asking for their attorneys fees which at the end of the trial will total $34,003. Looking at line 22 in the initial complaint Masterfile was also asking for the maximum statutory damages under section 1203(c) of $2500 for each image for a total of $67,500 plus attorneys fees.

If I am reading this correctly Masterfile was suing Martin and Laurie Gale for a total of $951,300 plus attorneys fees!

During the course of the trial was shown that Martin and Laurie Gale purchased a template for their website for $450 which contained the 27 images. The Gale's used the template as purchased and believed they had purchased rights to use the images by purchasing the template. Also during the trial Masterfile conceded that the Gale's use of the images was not willful and was in fact innocent as they had no reason to believe the images belong to Masterfile since they contained no copyright markings or information and the images were included with the template the Gale's had purchased.

Masterfile then reduced its demand amount from $951,300 to a retroactive licensing fee of $57,200 plus attorneys fees of $34,003 for a total of $91,202.

Since Masterfile conceded the infringement on the part of the Gale's was innocent in the court's final ruling they granted Masterfile $200 per image or a total of $5400. It is interesting to note that this is the low end of the $200-$30,000 scale.

So when all is said and done Martin and Laurie Gale must pay Masterfile $5400 for the innocent infringement of 27 images. It is my understanding that they incurred no legal costs as they knew a lawyer who represented them pro bono. Masterfile incurred $34,000 in legal fees to win $5400.

All of the documents I have in this case may be found at the link below.

http://www.scribd.com/collections/4394234/Masterfile-Corporation-v-Martin-Gale

<-------------Edit------------->

I forgot to mention when I first wrote this, credit on the information goes to Matthew who forwarded me some of the court documents and breakdown.  Great find Matthew!

[stinger]

A great victory for Masterfile.  I hope they win enough cases like this one to put them out of business - permanently.

Where is that sarcasm font?  I can never find it when I need it.

[Greg Troy (KeepFighting)]

This is why I feel if it is truly an innocent infringement then a simple C&D is all that is required with an offer to license the image if they want to keep using it.  If they refuse to take the image down or if you know it is willful from the get go then yes, take them to court and they deserve what they get.

You pick on someone like this who truly believed they had rights to the images because they paid $450.00 for a template they bought in good faith then you come at them demanding 74k for back licensing, when they refuse to be bled then sue them for almost a million bucks then Karma is going to bite you in the butt.

[lucia]

This is great! The judge gave Masterfile the absolute minimum the statues would permit for images that had been registered. Wow!

[Greg Troy (KeepFighting)]

I know, this was a great outcome.  None of us here believe that artists should not be compensated for their work, none of us believe that we should be able to use any image we want for free, we are about what is right and what is fair for everyone involved. In this is a case if you are going to be an asshat and sue an innocent infringer for a million bucks then you get the minimum allowed, no attorney fees and I hope a lecture on wasting the courts time for 4 years.

MasterFails issue should have been with the owners of the template who were profiting off of the images by selling the template not persecuting the end user who purchased it in good faith.  MasterFail upon investigation should have just made a simple C&D rather than seeing dollar signs and going heavy handed. 

This is great! The judge gave Masterfile the absolute minimum the statues would permit for images that had been registered. Wow!

[Oscar Michelen]

I can't say too much about this because i represented the Gales when they first got their Masterfile letter. MF will tout this as a win because the court did reject the argument we made in Chaga about their registration methods (though there are some differences between the two cases that I think was the  cause for the different result). But overall the case is a clear vindication of what I and this site have been saying all along - courts will not give large awards for these types of infringements if the arguments are well made. Also, it was huge blow to MF that the court did not award legal fees. Again the court agreed with our position that if the person immediately ceases and desists upon notification then legal fees may not be warranted - especially if a reasonable offer was made prior to suit. The case definitely was supportive of the strategies and opinions set out by ELI and its regular forum contributors.