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Embroidery Industry Consumer Alert - We listened!

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GRiddick:
Embroidery Industry Consumer Alert

You asked us to take another look at our overall approach towards trying to reduce digital piracy in the embroidery design industry. We listened.

Although our new approach does not excuse anyone for unlawful conduct in the marketplace, we are now going to direct more of our focus on where we have discovered 95% of the infringing embroidery designs over the past four months of intense research, investigation, and documentation.

The most surprising thing to everyone we have talked to about this new focus thus far is the fact that the top nine (9) embroidery industry design developers, publishers, and re-sellers are all heavily engaged in copyright infringement activity and appear to have been so for many years. No wonder small embroidery firms do not have a clue what is legal and what is not.

Yes, names you thought that you could trust, like Bernina, Great Notions, Dakota Collectibles, Amazing Designs, OESD, Oregon Patchworks, Cactus Punch, Embird, Ann the Gran, Embroidery Library, Adorable Ideas, Artistic Threadworks, Embroidery Central, Brother International, Hirsch, and others, have been actively engaged in digital piracy and have collectively distributed tens of thousands of infringing embroidery designs into your targeted markets. Some of your own designs probably came from them as well.

In most cases, they have claimed they owned the copyrights for these pirated designs, themselves. Thus far, we have not found a single company who was willing to stop the infringing activity and notify their customers that they, too, were potentially liable.

As some of you have suggested, we are also carefully evaluating any and all major clipart software CD/DVD publishers and web site operators who may have misled you as to whether or not you could use Imageline’s copyright-protected digital illustrations and designs to produce digital embroidery design files for commercial distribution.

We invented the software category for digital graphic arts content (including clip art illustrations and designs) back in the early 1980s and we know practically everyone in this industry fairly well. We will notify you of our findings over the next few weeks.

We have led the charge against digital piracy in our industry for over twenty (20+) years. We have never lost a battle to digital pirates and we do not intend to start doing so now.  We will reduce and disclose the piracy epidemic that has swept across your entire embroidery design industry during this decade.

Your future depends on our success on this mission more than ours.
Perhaps you can help us.

George Riddick
Imageline, Inc.

Oscar Michelen:
Dear George:

Glad to hear about this new direction. Keep us posted

Larry Pike:
Wow.  I'm not sure to what I owe the honor of being included with a list of companies like Bernina, Great Notions, Dakota Collectibles, etc.   Our business is a mom and pop (litterally) company as is at least one other company on this target list.   We used clipart from a major clipart website AFTER asking them if it could be used for making embroidery designs for sale and being told (in writing) that it was a permitted use for the artwork sold on their website.  To this day this clipart website still says their clipart can be used for creating embroidery designs for sale although we no longer use anything from their site and have removed all designs based on artwork purchased from them.  

I applaud the change in direction and the decision to leave the small small business owners out of this catfight.  It seems to me like there's plenty of large companies to go after on this list where there is at least a chance of making some money off the efforts.  Like most of the hundreds of small businesses in this industry we would not be worth the effort to sue.  Let's just say there is no pot of gold at the end of this rainbow.  We do however take this situation seriously and have handed the matter off to a lawyer for follow up as I am not an attorney.  

Larry Pike
Artistic ThreadWorks Inc.

Oscar Michelen:
Good Luck Larry, keep us posted, we want to see if Mr. Riddick keeps his word not to go after the little guy.

GRiddick:
Small "mom and pop" shops are the backbone of our society. I have spent almost my entire career running them and defending them against the larger companies in their industry who routinely take advantage of their size and inability to fight back.

As my last sentence in the earlier post states clearly, "Your furture depends on the success of our mission more than ours."

I applaud you for coming forward, posting your comments, AND hiring your own experienced attorney to give you professional advice. However, there are challenging times ahead for all of us who would like to see digtial piracy eliminated, or at least significantly reduced, in the embroidery design industry. Some of these challenges are quite complicated.

Unfortunately, you are now in a very dfficult position, but don't simply take my word for it. Ask someone who you can trust.

You see, you are likely going to be dragged into any litigation that involves whomever granted you these improper licensing and distribution rights, as well. Is it better for you to resolve all of these potential liabilities now with a settlement (and full release of you, your business partners, your company, and your end user customers) now, or later through the courts? Some people have made what we consider to be the obvious smart choice when faced with this same delimma. But many have not. Some have apparently gambled that Imageline is "bluffing" about our legal resources and our resolve. Obviously, those people do not know me very well, and did not believe me when I said earlier "we do not bluff".

Before I go on, let me state a few things that apparently have gone unnoticed by many of the embrodiery design companies we have contacted thus far this year. We want you to have all of the facts straight so you can make the right decision for you and your company.

1. We are the largest developer of original vector-based clip art illustrations and designs in the country, and the pioneer of the entire industry from some 25 years ago. We have millions and millions of dollars invested in our digital archives. Imagine how we felt when we found that over 95% of our own digital images we found posted online in a detailed survery we conducted last year were pirated. Less than 5% were properly licensed.

2. How can anyone stay in business with those kinds of alarming statistics?

3. We know the copyight laws as they pertain to the digital "visual arts" industries, which includes digital embroidery designs, better than any software or content development company we know, as weel as most of the people up in Washington who work on these copyright issues all of the time.

4. We have NEVER licensed a single company, big or small, the rights to sub-license or distribute via CD/DVD, or the Internet, a single one of our proprietary designs for use as digital embroidery design files. Anyone who has told you otherwise SHOULD be held acountable for ALL of the downstream damages they have caused. We will not be the only ones to lose based on the discovery that our copyrighted digital artwork has been stolen. You wouldn't if you were in our shoes either.

5. We are not talking about simply a handful of digital designs here. Our researchers have found thousands of our digital images in embroidery file formats and all we had to do was announce our intentions to enter this market in 2009 for them to start pouring out of the woodwork. It is shameful.

6. We have not pursued anyone who wasn't continuing the "cascading infringement cycle" in the market by displaying and allowing our protected images to be downloaded by their customers, or bundled into sets on CDs, DVDs, memory cards, and now even USB drives. No "end users".

7. In order for us to be properly, and fairly, compensated for the obvious market damages we have sustained, we need your help. We do not need for all of the small embriodery design companies to unite, put your heads into the sand, believe someone who claims she drew our designs herself, criticize the few that have tried to help us, make up excuses, and/or refuse to cooperate with any of our efforts to clean up your industry, as your own leading embroidery industry companies have refused to do for many, many years. Don't you ever wonder why?

8. Please discuss this with your attorney. In order for you to go after someone who may have defrauded you, and told you that you could sub-license and further distribute proprietary digital designs owned by Imageline, you must be able to prove your damages. The way this has happened for us in the past is that companies who we caught in the act of copyight infringement worked with us to resolve/settle their infringement activities. We worked together to release all of their end user customers, who are all potentially liable as well, and then their attorneys took those damages, plus any other legtimate costs they incurred, right back to the software or Internet company they claimed had misled or defrauded them in the first place. We have found nothing else that works better to protect you, the small business owner, AND your end users, who are also likely now liable for additional damages that continue to accumulate in every single case we have investigated and are now pursuing aggressively.

9. If you are one of the many small businesses in the embroidery design industry who believe what hapened in the earlier post happened to you, then please have your attorney contact Imageline right away. We are in the process of filing a number of very large federal lawsuits and you will need to decide whether you want to be on the side of the company trying to reduce digital piracy or the companies trying to profit from it.

10. Please make sure your attorney understands that you are a dealer, a re-seller, and/or a distributor, not simply an end user, Several copyright defense attorneys we have spoken with recently have not had this important distinction explained to them clearly and concisely by their new clients. Those kinds of lawyer/client misunderstandings do no one any good. The truth ultimately comes out. It always does.

While Imageline, as a small company, and I, personally, as Imageline's primary executive officer, have had to suffer a lot of sharp criticism, "badwill", and marketplace harm, based on some of the "less than accurate" posts made onto this forum, and onto the Yahoo Embroidery Groups, as well, over the past three months, I do see some benefits now, with more and more people putting all of their cards squarely on the table, minimal expense to all sides, and people now choosing which side (copyright protection or piracy) they really want to be on when this "war" escalates. And if you've ever battled sophisticated "digital piracy", especially delivered over the Internet, you will know what we mean when we say "war".

We do not lose this kind of "war". Never have in over 20 years and don't plan to start doing so now, when the stakes for all of us are higher than they have ever been before.

Thank you for listening. I hope we can work things out.

George

George Riddick
Chairman/CEO
Imageline, Inc.

griddick@imageline2.com

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