Greg, thanks for your welcome - it's a appreciated.
The details of your experience were quite interesting; a few things stood out to me in reading your synopsis, which I'd like to offer some comment on.
I have a blog on my site offering free advice to homeowners on things they can do themselves to maintain their homes to avoid having to pay someone like me to come out to repair them. One blog post was tips on how to make your home more energy efficient in the summer to keep your air-conditioning costs down and I put a humorous picture of a Beagle dog standing in front of an oscillating fan cooling himself. This image was found on a website belonging to someone we will call John Doe. John Doe had several "galleries" with pictures in them, the picture in question was located in a gallery titled "public" . Not only was the image in a public gallery but every image in this gallery had John Doe's name on it with a title leading the person to believe this was his image which he had placed in a public gallery for people to use.
Firstly, let me qualify what I am about to say by stating that I don't doubt your claims or position at all; I'm merely laying out my perspective on what you said happened to you and offering up my opinion.
I've ran into similar issues to yours quite a bit in the last two years: there appears to be a very common misconception that because a photograph can be accessed by anyone i.e. freely / publicly available (especially online), it must be in the public domain.
The facts are quite contrary: an image on a website might have been authored by the person whom runs or operates the site, or they might have obtained permission or license to use the image from the author or their representative, or it may indeed be a public domain image.
In any instance, the correct etiquette (so as to not fall foul of a legal demand) would be to contact the site owner and request permission - in writing - to use the photographs from their site; their response should either be to grant permission or inform you as to where they sourced the photograph from.
In the case of being given permission, you'll have a valid defence against wilful infringement if it ever occurs that they were not the author or rightsholder of the image in question (i.e. they lied to you); retaining a copy of the message will also serve to demonstrate innocent infringement i.e. you had a good faith belief that you were acting within the letter of the law.
In the case of being informed as to the source of the image, you'll have to go through the same steps again. Yes, it's time-consuming and your efforts might be for naught in the end... but lack of such due diligence could land you in hot water under current legislation.
The short version: it's better to get permission in advance than seek forgiveness at a later date. (I'll loop back to this with a example later on)
My first indication that this was not John Doe's image was when I received a settlement demand letter from Getty in a style that look like a lawsuit was being prepared against me, telling me I am guilty of copyright infringement and that I must pay $875 within 14 days or this would be escalated. I replied to Getty including screenshots of where and how the image was obtained stating everything appears that the image belongs to John Doe, I had remove the image immediately and I was willing to negotiate with Getty if they had exclusive rights as they claimed but please send me proof of your claim.
For a moment, let's assume that John Doe had correctly obtained and licensed the photographs in his "public" folder from an agency or image library. In appropriating the photograph from the folder from John Doe's site, you'd have committed a what is commonly referred to as a secondary or downstream infringement. It's a bit like making a copy of a copy - except, in the digital age, there is almost no way to tell which is the original just by looking at them, since the material might not degrade in any way through the copying mechanism (there are some technical exceptions here, but that would stray from the point)
The other possibility is that John Doe himself might not have legitimately acquired permission or license to use the photograph in question himself and, in discovering Doe's use of their photograph, it was just a few short steps for agency/library to find the one that you had used.
Getty said they will not send me any of the information requested and to go to their website and view the image and that is all the proof I need. They also said in their letter they would only provide proof of claim during discovery or in other words when they sue me. In an effort to settle the matter amicably I even had a local IP attorney send Getty a letter letting them know we were willing to negotiate but we just needed the information I had requested and if Getty was not sending it due to confidentiality agreements we would both be willing to sign a confidentiality agreement of our own barring us from disclosing any information sent other than with Getty for the purposes of settlement. Getty reply to this letter saying they would not send the information because it takes extra time and cost extra money to send us the proof and once again telling us they would only provide proof when they sue us.
Yep, this plain part sucks - no argument from me. My experience of certain lawyers is that they operate on an
eleventh hour basis i.e. they only prepare and provide information when it is absolutely necessary for them to do so; if they aren't required to provide a copyright registration certificate number until suit is filed, you can be dead certain that some of them will wait right up till that point to do so.
In an ideal world, they'd have all their ducks in a row
before they act - and some law firms absolutely require this before they'll even take on a case for you. For others, there are real-world time constraints on obtaining certain information and whilst it would be morally and ethically preferable for them to provide proof of copyrights when requested... yeah, they can drag their heels.
I'll also loop back to this later with some extra information.
I can also show you where Getty has sent out these letters over public domain images and one case settlement demand letters were sent to a Dan Evans over a picture of Henry David Thoreau taken in 1856. Once Mr. Evans pointed out this image was in public domain and he knew copyright law Getty immediately back down and dismissed the claim.
This is very troubling; I'm going to read over the link that you provided about this, thank you.
Another case of this and an attorney general complaint was for a picture of an F-16 fighter jet taken from a number fighter jet. Since the picture was taken by a government employee and released it was public domain, again Getty immediately back down and dismissed the claim
One quick comment: not
all pictures taken by US government employees are public domain; even here, there are certain exceptions as outlined at the following
http://en.wikipedia.org/wiki/Copyright_status_of_work_by_the_U.S._governmentAs an EU citizen, the US Government could theoretically sue me for copyright infringement if I were to make use of one of their "noncopyright" works.

...but how many people have fallen victim to this that do not know copyright law and paid Getty their average settlement demand claim of $1000 per image?
There's no way of knowing, but what I take away from your comment is this: the issue of copyrights and what you can / should / shouldn't and can't do online needs to be addressed at a very fundamental level, via non-inflammatory discourse and cool, measured reasoning so that nobody falls foul of the law
or abuses it.
The latter is very tricky because human nature makes us throw up walls when we feel we've been wronged and, all too quickly, it can become more about emotion than reason. This applies equally to those on the receiving end of a demand as much as those issuing them.
To close off, I wanted to loop back to two issues that I mentioned.
1) I had an incident about a year ago where I discovered a small 'news' website (Site A) using one of my pictures; I reached out to them in the usual manner and was pretty shocked by their reply.
They had actually found my photograph on a different website ("Site B") and requested use of it from them; they actually wound up paying "Site B" for a license to use my shot - even though "Site B" was not the rightsholder, nor had "Site B" legitimately licensed the photograph from me.
As "Site A" had a particularly strong basis from which to claim innocent infringement, I knew fine well there was no point in brow-beating over a photograph which they really, honestly thought they'd legitimately obtained a license to use. Their claim was amply backed up by documentation that clearly showed "Site B" had not only infringed my rights, but has also engaged in fraud.
It should go without saying that I pretty much went nuclear on "Site B" for their actions and turned them over to my attorney without notice; wouldn't you know it, they made all sorts of claims of "fair use", that they'd done no wrong etc. in about as belligerent a manner as you could imagine.
Yes, the situation eventually was resolved but believe me, it got very ugly first.
2) I also wanted to loop back to the issue whereby an entity issuing a demand does not provide proof of copyrights when requested. Let's look at how most large photo agencies actually get their photographs in the first place.
a) Staff Photographers
As the name implies, these are salaried staff whom are employed directly by the agencies they work for; because they are employees, the individual photographers do not own the copyrights to the work they create for their employer - the agency does.
b) Contributing Photographers
These are effectively "freelancers" whom take on assignments for agencies and, in return, receive a portion of the image licensing revenue as 'royalty payments'. The agencies do not own the copyrights to these photographs - the photographer does.
c) Stringer Photographers
Think of stringers as being temporary employees of the agency; contributing photographers can sometimes be asked to provide content to an agency as a stringer: they'll receive a fixed payment from the agency in return for furnishing them with the images from the assignment. The benefit to the stringer is that they don't have to wait on royalties to trickle in; the benefit to the agency is that they will then own the copyrights to the photographs which have been supplied.
Now here's where it gets really messy: if the photographer in question ordinarily resides outside the United States, the photographer and/or agency does not have to file a copyright registration application with the US Copyrights Office. Local copyright laws and the Berne Convention afford all the protections they required.
In fact (as I understand it) a non-US photographer / agency could bring a copyright action in the US courts for statutory damages without the need to file a timely registration; they'd still need to file a registration in order to pursue statutory damages, but they wouldn't have needed to file that registration within the otherwise mandatory "three months of publication" period.
I'll freely admit that no attorney that I've spoken to so far has been completely clear on this point as there doesn't appear to be any case precedents - yet. From a personal standpoint, I register my own works with the US Copyrights Office within the "timely" period anyways, chiefly because my key clients are in the US and this the majority of the infringements of my work also occur in the US.
So: as if the waters weren't muddy enough - a demand letter from Getty (or similar) might originate from one of their non-US offices, and the photographer in question could have been staff, a stringer or a contributing photographer.
As much as it's unlikely to be the latter (as it normally would be the contributing photographer's responsibility to pursue the infringement),
In any case, the party would need to use a US based firm to bring an action in the courts, so they're also likely to use the same US firm to issue the demand. I can easily conceive of a situation where Getty's EMEA office relays an infringement to their Seattle office for action.. and thus there might not be any registration certificate in existence at the time of the demand being issued.
For them do to so would not be in breach of any laws as the Berne Convention cites that formal registration of copyright is not required to enjoy its protections.
Like I said: this makes the waters very muddy and not one attorney has been able to offer me a definitive answer on the points above.