ExtortionLetterInfo Forums
ELI Forums => Getty Images Letter Forum => Topic started by: Katerina on July 20, 2011, 03:07:45 PM
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I am so glad that I have found this forum! Such a relief!
In May this year my husband got a demand letter from Masterfile for the usage of their picture on his travel website. It was only one image of Niagara Falls, and they are asking $2790 for retroactive fee. Of course, he didn't know that the image was copyrighted, we are originally from Russia, and we never heard of this, we heard of "piracy" when reproducting and reselling music and video CDs, but not images! He removed this picture immediately and contacted Masterfile with apologises. His business was closed at the end of the year 2010 - he didn't make any profit from Niagara Falls trips for tourists. He had partnership as a type of his business. Masterfile said that they were in a receipt of our e-mail and would contact us shortly. And we heard from them...in 1,5 months, saying that my husband failed to settle down the issue with retroactive license, and they were demanding the full payment within 5 days.
We tried to find an attorney, and contacted several one. All of them said that it would be more expensive to hire them than to pay in full, and they couldn't give any answers on what the options are untill we are their clients. We are not able to hire anyone, we just do not have any money for this.
Anyway, I created a letter for my husband, in which I asked to prove that they have the right for this image, and it was registered by Copyright Office. I asked what affect the usage of the image had on a market that they estimate it for about $3000. I asked them why there was no any copyright sign on the image, as this is misleading for many internet users , also we insisted on innocent infringenet if it occured - we had no ideal about copyrighting the images. Then, we also stated that the businees was closed, no profit made, and the main mean for advertising was using flyers and craigslist postings whiout any mentioning of the website where the image was. The statistics of website visiting was low - about 2000 visits for the homepage and about 130 visits for the page where image was, so I said it would be considered as fairly used.
Now we got a response from them, clarifying all the questions we had - and proving their registrations, agreements, etc. They offered to settle down for $1500.
I don't know what to do. We still don't think that $1500 is fair pay to Masterfile, but if the will proceed in court, we would pay more, as it is still the infringement, innocent or not. We used their price calculator to check their regular license fee for the image - we came up with $740, but not $930*3=2790 as they charge. Are $740 their actual damages? They stated that the amount they were asking for includes regular fee+ actions to find infringement+efforts to force infringement, which sounds reasonable, from one hand.
If anyone can advice something, I would greatly appreciate it. I just want this to go away, as I do not sleep at nights because of the stress it causes. If we pay them, where are the guarantees that they will not send something else?
Hope I can find an answer....
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Was your husband's business was a corporation?
If yes, and the business has been shut down, then masterfile is out of luck.
S.G.
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No, it was not a corporation, it was Partnership....when we went to accountant for tax preparation, she said that partnership should be formed when the annual revenue reaches to $1.000.000. She adviced to close it as partnership and act as self employed. He closed his partnership, but quit his travel trips because it was winter time and there were not interested people to go to Niagara Falls, and then we bought a house and it needs a lot of repair, so we both work full time and then in the house....The business died at all....
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Also want to add, that I have read the Copyright Law Section 5 - about infringement. It says that in case of innocent infringement the paynment can be reduced, if defendand can prove the infringement was "innocent". In our cases, we cannot prove it, as my husband didn't use a template, didn't order his website from someone else. He just found the image on Yandex.ru - russian search engine, and saved it with right click option, don't even thinking that this is illegal. He just didn't know that this law applies to digital images....
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If the image in question is in fact legitimately owned and copyrighted by MF, then they could prevail if they decided to take this to court.
I'm making the assumption that you're posting here because you do not wish to settle unless you have to.
I'd check to be sure that the agreement(s)/copyright in question were in place at the time of the infringement. They'd have to legally own the content at that time.
If the image was copyrighted as part of a "collection", their standing would be a bit weaker.
Copyrighting many images as a "catalog" (ie. "The Best of Masterfile", "The Picture Show", etc.) is weaker still.
One can copyright a catalog of images; but some or all of the artists in question may still own the actual copyright to the individual images.
I can say with certainty that using a collection of images to prove standing has not met with great success for some plaintiffs recently.
When I say "weak" or "weaker", I mean that you can use these as a possible deterrent to them suing you if you don't pay.
Such a strategy sometimes compels them to go after "softer targets".
In addition, "weak" or "weaker" copyright standing means that you would have something to argue in court if it came to that.
Of course these are aggressive postures that carry no guarantees; you'd have to assess how much risk and stress you can handle.
In litigation, decisions (and the amount of awards) based on "grey areas" in law really come down to a judges' opinion (interpretation of the law).
Some people with only one or two alleged infringements simply wait it out.
That is, they take the chance that they won't be one of those who gets sued, and it comes to nothing.
Or, they may even get sued, but the suit is dropped before it ever gets to court; sometimes higher priority cases arise and are pursued instead.
They (MF, Getty) threaten everyone that they can; but they simply cannot sue everyone.
A lawsuit over one or two images doesn't occur very frequently.
They'll harass you for about a year to a year-and-a-half regardless.
Again, this is an aggressive posture that carries no guarantee; you'd have to assess how much risk and stress you can handle.
Some who play the waiting game, and are sued, and then find that a court hearing is imminent may choose to settle at that time.
That makes it go away. However, in such a situation, the defendant may be in a weak position.
Those such as MF often attempt to raise the price at this time, and the victim may be compelled to pay this higher price just to get it over with.
However, some people employ the "let's see if they actually sue" strategy in situations wherein the amount demanded is very high.
When I say "very high", I mean that the stakes are high enough that attorney fees seem small in terms of the demanded settlement amount.
These sorts of people may be prepared to call the bluff of their adversary and head to court.
I'm not an attorney, but those are my feelings. Yes, I'm a bit of a fighter.
Each person must balance their evidence, risk tolerance, budget, and yes even fortitude in order to decide what to do.
There are people out there that they do not want to mess with. Literally.
Others make their best deal and are done with it.
Both types are happy in their own way.
Best of luck
S.G.
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Don't pay! Don't get bullied by this Toronto mob. Offer $250 per image. If they don't take it, discontinue communication. Many people don't even respond.
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Hey guys!
Thanks for support! S.G., that's right, we don't want to pay unless we have to - that's normal reaction from everyone.
We are evaluating our strengths and weaknesses, like if we were preparing for the court hearing (we have an immigration court experience - and don't want to experience anything else like this). If we are sure that they will not follow after us, then we would ignore them. It would be easier if my husband bought a template of the website and this image in there, or if he hired a freelancer, or a website building firm - then yes, we would be able to prove our "innocent infringement". But he saved the picture from internet. We have nothing else but only "our saying of he didn't know". If you were a judge, would you accept it with no proof? No. They sent us the proof of the image was registered, and we have already contacted the Copyright Office - they didn't lie. Though, Masterfile register their images in "bulks". And it still rise a question for me: when they register their collection of thousands of images in it, is it this collection is considered as copyrighted work? If so, if we used only one image from this collection, does it mean that we used only one tiny part of their registered work? If so, can we use this fact as a defense based on fair use? That's true that the fair use reffers to using for educational, research, comments etc., but still a judge will consider 4 factors in determining fair use: 1)nature of work;2)purpose of use (in our case - commercial - bad point for us); 3)the amount and substantiality of the portion taken; 4)the effect of the use upon the potential market. I have question regarding the last 2 factors: if we used only a tiny part of registered work and the effect it had on stock photo market......Any ideas? Of course, it didn't have any affect on a market, in my opinion. They did sell, they are selling and they will sell no matter if infringement occurs or not. The only loss they have is their regular license fee from my husband. Just don't know how to prove all this....
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That's what my husbant got by e-mail in response to our requests:
Dear Mr. :
I am in receipt of your emails dated July 14th and July 18, 2011. In response to your emails, please note the following:
1. Masterfile is in the business of licensing rights-managed images for commercial reproduction by clients around the world. We have been doing so for nearly 30 years. While we would prefer if end users licensed our material legally, unfortunately this is not always the case. As such, we must dedicate valuable resources which could be utilized elsewhere to locating infringing use of our intellectual property, and enforcing our copyright. We do this because the unauthorized use of our images negatively affects us and our artists.
2. The image you published on your commercial web site is represented exclusively by Masterfile. As exclusive licensee, Masterfile has the right to protect and enforce its interest in the image and is entitled to the remedies provided by the Copyright Act. Masterfile has no record that it has authorized your use of the image. The use of the image, without a valid license from Masterfile constitutes copyright infringement.
3. With all due respect, many of the comments contained in your correspondence are without merit, irrelevant and are certainly uniformed. In addition, your attorney’s comment that a rights-holder must “…put the copyright sign…” on their intellectual property in order to protect it is completely false. There is no requirement or obligation for a copyright-owner to assign a copyright symbol, watermark or any other type of identification to a copyright-protected work in order to protect their rights to their intellectual property. It is solely the responsibility of the end user, the party publishing the intellectual property, to ensure that they are not infringing on the rights of any party prior to publishing said material.
4. As per your request, I have attached a copy of our Certificate of Registration number VA 1-023-866, issued to us by The Library Of Congress, United States Copyright Office for the registration of Masterfile Corporation’s (“Masterfile”) rights-managed image number 700-00022728 ( Niagara Falls , ON ). In addition, I have provided you with a redacted Artist Agreement with Mr. Miles Ertman, the artist related to this matter, for your review. Please refer to Section 4 – “Assignment of Copyright” of the attached Artist Agreement with regard to your question related to the ownership of the image referenced above.
5. Our Claim amount in the sum of US$2,790.00 includes: (i) the regular fee for licensing the image; (ii) our external costs associated with locating infringements of our copyright protected materials; and (iii) our internal costs associated with enforcing our copyright. The fees pursued in infringement matters where our rights-managed materials are published without license or authorization from Masterfile or compensation being paid to the artist, are fair, balanced and reasonable.
6. I have attached a PDF document containing a side-by-side comparison of the image you published on your commercial web site and a copy of our watermarked image number 700-00022728, for your verification purposes. Review the images closely; I assure you they are the same image.
7. In the absence of a watermark (according to your statement), it is reasonable to assume that the Masterfile image you acquired through the Yandex.ru search engine was likely licensed to a legitimate user who legally published it on their own web site. This does not legitimize your use of our image.
8. “Innocent infringement” is not defense to liability, but is only considered in assessing the appropriate measure of statutory damages. Moreover, it is your burden, and a heavy one, to show that you are entitled to the lowest measure of statutory damages based on qualifying as an innocent infringer. Depending on the circumstances, Masterfile may elect to receive actual damages instead of statutory damages.
9. Your use of a Masterfile rights-managed image has caused damages to Masterfile and the artist that it represents as Masterfile has not been able to pay royalties to its artist for your use of the image. It also potentially harms Masterfile’s ability to license the rights-managed image. For these images, Masterfile needs to carefully track and control their licensed use so that its clients can know if their competitors have used the same (or even similar) images by providing usage histories for rights-managed images. These rights-managed images are more expensive to license than other types of stock images, and the control of their use is vitally important to Masterfile’s business. The bottom line is that Masterfile’s business is licensing images so it harms Masterfile’s business when it is not compensated for the use of its images.
10. Please feel free to consult with as many attorneys as you wish. And please note that if Masterfile is forced to litigate this matter, we will willingly provide any and all documentation required by the Court at that time. We have nothing to hide.
Be advised that if this matter is not resolved immediately, Masterfile will be left with no choice but to commence litigation. In such event, Masterfile will seek all remedies available under the Copyright Act, including statutory damages and all legal costs.
This letter is an attempt to settle this claim. Masterfile reserves all its rights and remedies whether legal or equitable.
Best regards,
John MacDougall
Well written, huh?
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Miles Ertman... Miles Ertman...
I knew that this name sounded familiar.
His was one of the images allegedly infringed upon in the MF vs Country Cycling case:
http://www.scribd.com/doc/38990144/Masterfile-vs-Country-Cycling-030807-12-4#
You'll notice in the linked document that the corporate template is dated.
But there's no date where the parties concerned signed (I made a note of this here previously).
Seems like a pretty serious oversight. Unless it was intended to be intentionally misleading.
S.G.
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Find out what the actual value is for this image. Not what Masterfile posts on their website. Is it $740 per year? Not likely! What do other websites charge for similar image? In previous cases the court established the market value of the image, because Masterfile fees were insane. Normally fair value of those images is around $20-$60 and there is no time limit. The cycle company that was sued paid just above $1100 for 4-5 images. That is why Oscar recommends offering $300 per image. This amount would include their internal costs of chasing you. The interesting thing is that all the images infringed are rights-managed. They maybe switching some royalty-free images into rights-managed as soon as they find an infringement to make the extortion worth a while.
It is a shame that Masterfile attacks hard working immigrants such as yourself who try to set up their own businesses.
There is enough information here in this website to form a good defense strategy, should they take you to court in the unlikely event. They pursue 135 infringements per week according to Masterfile CEO. The probability of them going after you is very small. If you don't pay, they will outsource your case to their "collection agency" that will call you to ask for money. When they do, you tell them to stop calling you, and that you dont have any agreement signed with Masterfile and don't own them any money. Their collection agency can't do anything to your credit record either, so there is nothing to worry about. This is what we did over 2 years ago and we have never heard of them again. We are in the USA as well.
They used to have more employees then. Now they have even less people to chase the infringers. Many probably become disgusted with what they did and quit or got laid off because they were either not bringing enough money, or their victims become smarter and are either refusing to pay, or never respond to those rude extortion letters.
There are many companies like that trying to get your money for patent infringements especially. Those that pay, regret when few years later the court invalidates their patents or limits their actions. This Copyright trolls will face similar fate when US Copyright Laws get amended. In Europe and many other countries laws protect you, if you remove the infringed content upon notice. You can't have some Canadian company - Masterfile extort 50K from some guy with a website (see one of the posts below by Mastrik). This is more of a crime than the infringement itself.
Demanding from you nearly $3000, or even $1500 for two images that would normally cost $30 each at regular market price from another website is criminal extortion!
Their goal is to make you mentally and emotionally exhausted with their lawsuit threats until you cave in and send them a check. What happens then, salesman John MacDougall gets a commission from your hard earned money. Each time you receive their letter, you read it, put it away as evidence of extortion and move on with your day to day business. Don't let it steal your sleep either. This is exactly what they want. It is psychologically driven tactic to take advantage of your weakness. Their deadlines are another sales tactic to make you pay. This is how they make their millions.
Don't give in! Don't pay them! If they don't take your $300 offer that is their loss and you will never pay them any money.
If they took you to court you would not need to pay more than $3000 anyway , which is what they want now. They may try to lower this to $800 later, but that does not mean that you should pay it either. This isn't any kind of a deal if the fair value of those images is just $20. It is just money. It will not give you a criminal record, or ruin your credit history. It is nothing. The worrying and loss of sleep over this is only you doing it to yourself. Be strong. Only strong people can be successful in business. Learn to wear a thick skin and steel helmet. Don't let others walk on your head. Especially the Canadians:)
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I have read the agreement of Miles Ertman and Masterfile. It was signed in June 1999. I have checked the term of this agreement, and it was said that the agreement is for the term of 3 years and then would be automatically renewed unless written notice of termination was sent to Masterfile. So, there is no expiration date to this agreement.... It was also said that the artist authorize Masterfile to claim infringement damages on his behalf. so, according to to all the papers, they do have a claim.
I have checked the registration papers. It says that the nature of work is Catalog of Images Displayed in Internet, so what they registered was not the particular image, but the collection of many images - so called compilation. As Oscar says - one work. So, does it mean if my husband used only one image from their collection, he used only one tiny part of their registered work?May be this could get a sort of relief from "fair use"?
How can I check what their actual damages? We went to their website, and tried to see the price for the image - its regular fee. We came up with $740. I understand, that this amount of money they "lost" with the usage of the image by my husband. But they add their external and internal costs for finding and enforcing infringement. How can we find what these costs are? I don't think that they will share with all this information.
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I don't feel that a weak or invalid copyright registration would relate directly to "fair use". "Fair use" guidelines are usually rather specific.
If MF's registration is weak, then you could make a defence on that basis.
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If you choose to fight this, I have provided some interesting links below.
These relate to actual, recent court decisions that show certain types of "bulk registrations for copyright" to be invalid.
There's lots of info on the 'net about this, and I think that there's been some other examples since then.
You could also get the actual court transcripts from Pacer for a small fee.
Study these, and then you may choose to remind masterfile how weak their case is. They might back off.
http://thewla.org/blog/?p=120
http://www.ppa.com/ppa-today-blog/copyright-alert/member-alert-do-you-have-image.php
http://www.ppa.com/ppa-today-blog/copyright-alert/corbis-responds-to-bulk-regist.php
I would also want an affidavit from Mr Ertman to indicate that he hasn't rescinded his agreement from over a decade ago.
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Again, there are some risks to a court fight.
The worst case is that you could lose, owe MF the money, and have to pay your attorney fees and also their attorney fees.
The worst case for masterfile is that they could lose, they'd have pay their attorney fees, pay your attorney fees and get nothing for their efforts.
In case you've heard that MF is a nice organization is to deal with, I can refer you to the case below.
http://cas-ncr-nter03.cas-satj.gc.ca/IndexingQueries/infp_RE_info_e.php?court_no=T-2166-09
The last entry reads: "Writ of Seizure and sale directed to the Sheriff of city of Abbotsford, Fraser Valley Regional District, BC issued on 24-MAR-2011".
So, I would imagine that a lien was put on this person's house or car or something when he lost the case (he didn't show up for court), and then didn't pay.
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As for MF's "actual" damages. You could compare their figures to other previous court cases/awards to see if they're reasonable.
This is probably what a judge would do in a smaller case such as this.
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I hope that I have illustrated how you may have a basis for a defence, while also showing the risks involved.
Best of luck, and let us know how everything goes.
S.G.
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Thank you S.G.! I am already studying all this!
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Katerina - in Country Cycling the court awarded $1,100 for infringement of several photos but treated it as single infringement because they were registered as a compilation. If the same images are involved in your case, MF could argue that this is the amount of the infringement's value. You should read the forum discussion on this site when that case came out.
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Thanks, Oscar! My husband has the claim from them for only one image. So, I believe, in our case it doesn't matter if they are registered as a compilation or not - it is still one infringement. Am I right?
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Yes you are correct. But if you read the Muensch case you will see that according to that decision, MF may not have the right to claim that single image as a registered image if they registered as part of a compilation
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Does the ruling in Muensch case still stand? If so, I have a question regarding the compilation registration. I just received the registration paperwork from Masterfile and it shows 3 pages of authors and works ranging form 700-0001 through 33000. Most are not for hire, but the image in question for me is an author who uses a pseudonym name of MTPA Stock and is listed on the form as "for hire." Does the Muensch ruling still apply in this senario?
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Thank you so much, Oscar! I will study Muensch case.
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You need to get yourself freed of the paranoia and ignore everything. Dont respond to anymore Masterfile letters and you will be just fine. Trust me. Don't listen to anoyne else here, that you need to reply, give an offer etc... just forget it. never reply, never pay. Thats it. Problem solved.
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Hey, guys, could you please help me to understand this:
"§ 103. Subject matter of copyright: Compilations and derivative works
(a) The subject matter of copyright as specified by section 102 includes compilations and derivative works, but protection for a work employing preexisting material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfully." (employing preexisting material - in case of Getty and Masterfile, does this term mean images taken by photographers?)
(b) The copyright in a compilation or derivative work extends only to the material contributed by the author of such work (if Masterfile is the author of compilation, but is not the author of the images taken by photographers, but has agreement with them - does it apply here?), as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material."
any ideas?
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Well, I got totally confused.
Masterfile registers images in compilations, and is the author of this compilation even though is not the author of each particular image. So, this compilation, the catalog, is their registered work, thus using one or several images from their catalog is using some part of their registered work, right? So, if I understand correctly, they have all rights to claim damages from infringements of their registered work – compilation. Right? Then how does Muench case apply here, saying that they cannot claim damages unless they register each particular image? May be I am misunderstanding smth…… or got overhelmed....
Any comments on this?
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The info that I was sent from Masterfile showed that 33,000 images were registered at one time. However, they included 3 pages of authors along with it. Now, since I can't see the individual image in the compilation, I don't know if it shows who the author is and if other relevant info is attached to the image. The way the law is written seems rather confusing in my opinion, even the Muensch case results are written in a confusing way. It really does take a lawyer to translate! I don't know if the reason the they were ruled against is because each image is not marked accordingly or if it is because some of the registrations only list one author and then "numerous others," without listing their individual names. In my case each author's name was listed, but I don't know if they were attached to the images that they created. This is a point I would like clarified as well.
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True, I have the same question. But, I think that the only way to check if the image in question is really associated to that registration and author is to request this service from Copyright office, but there was a topic, that most of CDs are corrupted, so you still cannot see, and you have to pay for this, but the court can accept the sworn statement that the image in question is on that CD anyway. So?
Confusing......Muensch case is written in confusing way, I read it several time........
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Just because Oscar says it, it does not mean that the Judge will accept sworn statements from Masterfile against little person like you Katrina.
If the image is not on the CD it is not part of the compilation and it is not registered period. The Muensch chase will apply here because there will be no way of knowing whether or not each image on the CD was properly identified with the artist name. Any sworn statements will not prove it beyond any reasonable doubt and therefore will not be accepted by the judge or jury.
Here is a hypotetical scenario:
The judge ask Masterfile: Where is your evidence of registration?
Masterfile will say: Here, on the application..we list all artists right here.
Judge: Ok, where are the pictures?
Masterfile: All pictures are on CDs that we sent to the Library of Congress.
Judge: Lets see the pictures. Lets see if they have been properly named because we don't like images registered in compilations. Compilation works consiting of pictures that cannot be identified by the artist name make the registration invalid. Please put the CD into a computer now. I want to see the pictures.
Masterfile: Actually, Sorry your Honor, the CD's dont work and we can't see any of the images, but we swear that they were there.
Your Lawyer: My client swears too that he/she had no reason to belive that the image was copyrighted and therefore it is an innocent infringement.
Judge to Masterfile: Well.. We Masterfile we can't just take your word for it. We don't even know if the picture you claim is on the CD let alone confirm valid registration (Muenuch case).
Masterfile: But your honor, all the pictures were there on the CD.
Judge: Given the incomplete evidence of proper registration of individual images and inability to confirm existance of those images, I rule the registration invalid.
Judge continues: Given that we have lack of registration and the defendant innocent infringement, the amount awarded to Masterfile is $200 per image. No statutory damages and legal costs are owed to Masterfile.
You pay $200, go home, celebrate and blog about it.
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Lol! Funny :)
Thanks for support :)
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Nemen Night does make a good point that the plaintiff must prove his/her case.
While the burden of proof isn't as high as in a criminal case, there must be compelling evidence nonetheless.
Part of the MF/Getty tactics are intended to make the average person (who often knows little about copyrights) feel that the case rides solely on the defendant's ability to prove "innocence".
S.G.
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I know.... We got this feeling from correspondence with them.
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I am in a similar situation except the extortion amount is MUCH higher. My understanding is Statutory Damages are only applicable if the infringement took place AFTER the image had been registered with the U.S. Copyright office. Is this a true statement? Does no statutory damages also mean they cannot make me liable for their attorney fees if legal actions are taken? Assuming both are true, it is highly unlikely they will persue litigation???
In looking at the Copyright database, the artist registered thier compilation (not individual images) only this year; while the demand letter makes the accusation we have had the image on our site for several years.
Any thoughts, anyone???
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VIN1028,
I would say that you are in the position to just about tell the photographer or stock agency to pound sand.
SG just put up a great explanation of the copyright registration law in the US. See:
http://www.extortionletterinfo.com/forum/index.php/topic,2188.msg2854.html#msg2854
This is one case that I would think would be highly unlikely to go to court. You may want to consider making a low-ball offer without admitting any guilt and in the interest of not wasting time. I have read on here that such a good-faith settlement offer might mean they have to pay all court costs (theirs and yours) even if they win an award. (In the VERY unlikely case that this went to trial.) I'm sure someone will correct me if I am wrong.
The one thing you should be doing is trying to find out and document for yourself when and where the image first appeared on the Internet. Also see if it appears anywhere else and if there are similar images available that are not "rights managed" and available for a flat license (or public domain). Also you need to document your story as to how you came upon having the image on your site.
I think it's funny the artist is just now getting around registering it but wants you to pay for using it for years. Pretty snakey.
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Thank you, mcfilms. This is encouraging to hear. I greatly appreciate your valuable input.
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It does not end on you paying $200. Your lawyer will file a case for a frivolous lawsuit, mental distress and other crimes by Masterfile. You would make money on this.