Masterfile questions

[oops]

A client of mine received a Masterfile letter a couple of days ago, and I found this site in an attempt to research its legitimacy.  I'm the graphic designer, as well as a photographer, who takes copyrights seriously.  I also operate ethically in all that I do and take full responsibility for every aspect of the site.  I desire to resolve the matter amicably and fairly, though I'm not sure "fairly" is possible, because Masterfile's standard rates for images are already exorbitant (and the reason I'm not already a customer), so their "settlement" offer is even less reasonable, IMO.  

I tend to keep very detailed records of my online transactions, but have none for this particular image.  As I recall, I pulled a couple of images that were cited as public domain to use on his site.  He didn't want any stock images on the site, and we agreed that at a later date, we would do a shoot in his offices, so that the images used would be his alone.  That never came to fruition, and I don't recall finalizing my files in that I didn't go back and pull screen shots of where the images had been offered and save those documents as back-up.  I tend to be a stickler for my process, but if I did go back, a recent hard drive failure has rendered some of my documents corrupt (including my receipts directory) and I'm unable to provide any back-up.  A true failure on my part either way.

I have a ton of questions I'm hoping someone more knowledgeable in all this may have a few minutes to answer.

Is the client on the hook for whatever the outcome of the matter is, without regard for any action I take?

He is the registered owner of the website and the company it represents.  I did the site and am 100 percent responsible for placing its content.  Is there a method where, in the eyes of a court, I would become the responsible party in his stead?

If I step up to the plate, does Masterfile now have the right to sue us both?

I take full responsibility, and, would like to be named as the party in any litigation or collection process, but he's willing to communicate with Masterfile and remain the responsible party if it's in the best interest of our respective companies.  If Masterfile is as greedy as it seems and it's within their legal right to do so, they might come after both of us for one infraction.  I want to be fair with them, not offer them an opportunity to collect twice as much.

Has anyone purchased a license after the fact and indicated same in their response letter with positive results?  Is this a viable tactic?

While their prices border on ridiculous, I had this idea that I might go to the site, purchase x-period of usage, and then respond to Masterfile's demand stating that we apologize, and due to our inability to produce a record of purchase and our desire to make things right, we made this purchase today, and here is our receipt.  Additionally, we've removed the image, and consider the matter closed.

My fears would be that (1) they would come back and say, "That's all well and good, but you still owe us 2x times the usage fee" and then sue for that additional amount and be within their rights to do so and (2) this would be viewed as an admission of guilt.  What I'm getting at is that I respect their legal rights and wish to settle the matter out of court.  But what I feel I did wrong was to not back up how I obtained the image; I did not and will not admit to outright theft of an image, as that isn't what occurred.  My hopes would be that (1) Masterfiile would accept this as fair resolution and (2) a judge would view this as a viable attempt to resolve the matter.

How much is "reasonable" to offer as a settlement, i.e. what might a judge view as being reasonable?  Do competitors' prices play a role in calculating "reasonable"?  

Personally, I don't feel that the image or its usage is worth more than $50 based on my own knowledge and comparable image offerings at other sites.  I've calculated the demand figure of $2790 for one image, as follows:

     A one-year license for "Website - Promotional" on the "Home Page" of a business website for many territories is $930.

     Paragraph 4.6. Copyright infringement of Masterfile's Terms for registered users provide that, "Masterfile will be entitled to, and you will pay, a compensatory fee equal to the greater of U.S. $1,500 or 3 times the usual License Fee for each Unauthorized Use by you of any Image in addition to any other rights or remedies available to Masterfile under law (without you thereby acquiring any rights to the infringed Image)."

Realizing, however, that they do have the right to sue, ignorance is no excuse, etc., and based on our usage, I feel that $500 is a reasonable offer to prevent the matter from escalating.  I would expect them to decline the offer, but what might a judge, based on historical references, find reasonable?

How much weight do the terms of service hold for someone not registered and therefore not bound by those terms?  Would a judge likely take this into consideration?

If I've ever been on Masterfile's website (and I don't recall having been until now), searched images, and found the pricing, I would certainly not have become a "registered user" because I would never consider paying that much money for a stock image.  I keep a file of all of my site registrations, and Masterfile isn't among them.  This may be a mute point, but it goes to pricing and my responsibility to adhere to their terms or pay sums outlined within them.

How can I confirm that the photo is, in fact, one of those registered with the Copyright Cffice, since Masterfile registers only compilations?

It appears to me that the online search offered by the Office only returns text records.  I know that I can request a certificate from Masterfile, but being a graphic artist, I also know that they could obtain one certificate and then graphically modify it to use in their scare tactics and produce this as evidence of their rights.

My goal is to be treated fairly while respecting Masterfile's legal rights, but I have read enough online to see that "fairness" isn't in their vocabulary.  Based on that, I want to protect myself as much as possible and not be bullied into something unreasonable.

Any advice anyone can offer would be greatly appreciated.

[Oscar Michelen]

Dear oops:  Most of these questions are answered in our videos and in many posts on this site, so I will just give you a quick response to your questions and ask you to browse the site if  you want more detail.  You can also retain my firm to handle the Masterfile matter on your and your client's behalf:

Is the client on the hook for whatever the outcome of the matter is, without regard for any action I take?

The companies go after the end user because they received the benefit of the infringement and because they are likely to be less tech-savvy and more intimidated by such a claim.  The end user is on the hook (if anyone is) unless you settle ontheri behalf and get a release that names them as well as your company

If I step up to the plate, does Masterfile now have the right to sue us both?

Mastefile has the right to sue any party that it feels is responsible for the infringement of their IP.  But they don't get to collect double damages.  Whatever the damages are, all responsible parties are jointly and severally liable - meaning they can collect it all from you or all from your client or half and half or 90% 10% whatever they want. But they can't collect twice for the same infringement

Has anyone purchased a license after the fact and indicated same in their response letter with positive results? Is this a viable tactic?

Yes and Masterfile responds exactly as you predict.  I don't recommend doing that because it just gives them more money. Take the image down and deal with the prior alleged infringement

How much is "reasonable" to offer as a settlement, i.e. what might a judge view as being reasonable? Do competitors' prices play a role in calculating "reasonable"?

Every case is different so there is no easy answer to this question.  They may not have a valid copyright under Muensch or they may have an excellent claim, depending how they were registered , the nature of the use, etc.

How much weight do the terms of service hold for someone not registered and therefore not bound by those terms? Would a judge likely take this into consideration?

Unless Masterfile could prove you downloaded directly form their page, you should be able to argue that you are not bound by their terms of service.   At any rate, you are bound by the Copyright Act and that gives them the remedies to which they are entitled if they prove their case.

How can I confirm that the photo is, in fact, one of those registered with the Copyright Office, since Masterfile registers only compilations?

In negotiating with them, Masterfile has always provided us with their registrations, all of which are compilation registrations. They do not feel Muensch was correctly decided and that it only has limited value as it is only a trial level and not an appellate level decision. You notice that the digital image companies have not appealed Muensch that I have seen.  

Negotiating with them is balancing all of these factors with your threshold for litigation and  risk.  In dealing with claims that have been filed in court, some judges view this very seriously and others feel they are nuisance value cases. Every case is unique and has to be assessed properly to decide the right settlement figure.

[oops]

Thanks so much for your time and effort in response, Oscar.  

I did browse this site and several others for several hours prior to posting, although I'll admit I didn't watch the videos (I'm video-adverse; I don't much watch TV either!).  I'll take the time to watch the videos now and advise my client to do the same.

Either my client or I (or both) will be in touch.  The more I think about it, the more I feel like you're the person we should have on our side.  I'm traveling tomorrow and he'll be in his office.  Perhaps we can conference.  If not tomorrow, then another day this week.

Again, thank you.  I do appreciate your time.