Masterfile Strikes, but is Negotiating

[ladyLiberty1886]

First, I wish to thank Oscar and Matthew for dedicating so much time and energy to this site and this forum.  I can only imagine what it's like to juggle work, life and this website around. 

I am a secretary for a non-profit* sports organization, and we have been hit with a Masterfile letter for an infringement of an image on our website.  The image was taken down immediately; and thankfully, because we use Joomla! content managing system, they were not able to search into the back-end of our site; and The Wayback Machine has not been able to archive our website at all. 

The image in question was located on a login page and the link to it was very obscure.  It was obvious to us that a robot found this page because of the near-zero activity we get from our registered users.  The little activity gave us the advantage to take down the login/registration pages and the pages that only registered users were allowed to see. 

A few email conversations have come and gone between us and Master file; and the price has dropped from $2,000 to $1,000.  We offered to pay $100 (We're not a large organization.) to settle this and if they refused to please send us a copy of copyright registration (specifically) from the US Library of Congress.  Our offer did not suffice Masterfile, but they are willing settle for $700 to cover the license to buy the image for a year on a worldly-located, web "promotional" page.  I add this part in because if our webpage was considered an editorial or intra/extranet, then the cost of a license would cut in half.  It was just a login page, not a registration page.  Is it still a promotional image?

Now for my next email to them.  We want to reiterate to them that we are non-profit and do not make ANY money off of our website. We also want to tell them, again, that our website is only informational and the only commercial activity are banners for our tournament sponsors.

I'm curious if we should offer $300 or $200, since I see those numbers floating around this website often for innocent infringement. Or should we stick with our $100?  (Our website was made in late 2010 and the image was copyrighted in 1999.) Whatever the amount, should I threaten that we'll disband our organization and website if they do not comply?  We are ready to do so, but we haven't told Masterfile that.  The other thing we could do is ask Masterfile to accept our offer or we'll use the money to buy Oscar's time.

Suggestions from anyone would be most helpful.  Thanks again, Matthew and Oscar, for all that you do! 

*We are an official and registered non-profit organization, so it wouldn't be hard to prove our business status.

[ladyLiberty1886]

Looks like no one else is dealing with this situation; but I'll update this as this event goes along. 

We have contacted Consumer Protection and the Better Business Bureau (BBB).  We won't be hearing from the Non-profit expert from the Consumer Protection until later this week; and until then, I'll see if filing a complaint to the BBB is necessary.  My understanding with the BBB is not to settle legal situations, but rather how business is conducted.  So, if I were to file a complaint with Masterfile, it'll be on the Copyright Compliance's demand for us to reply in a week.  In our organization, we do not have time to meet and discuss our action... especially off-season!

For now, it's just asking Masterfile to please be patient with us.

[Boobaychap]

LL,

Don't panic and don't give up.  My situation was similar.  After a couple of exchanges with MF, one with their collection agency, and one with their IP attorney, I have yet to pay a dime (though I eventually raised my settlement offer to $300).

Basically, you have to do your homework.  Is the image in question registered as a part of a compilation?  If so, MF's ability to recover actual damages is limited based on Muench v. Houghton Mifflin.

MF's ability to recover statutory damages is also likely to be minimal because a judge would likely reduce any award for statutory damages if the infringement was truly not willful.

MF's entire strategy is designed to intimidate you into conceding.  Don't give in and pay their outrageous demands--Litigation is not a cost effective fall-back option for them, particularly because courts have lately demonstrated no appetite for frivolous infringement suits.

Hang tough.

[Oscar Michelen]

good advice, but I would add that its always best to have some offer of settlement out there in writing in the case they do sue. Masterfile was pretty litigious in the beginning of their campaign but  I have not heard of them filing a flurry of lawsuits to prove their point like they did awhile back.