My Position on the Riddick/Imageline Issue (Oscar Michelen)

[Oscar Michelen]

Introduction
I thought it was time I responded to some of the concerns and posts on the Imageline issue.  I want to make clear that this post is for informational purposes only and does not constitute legal advice. Every legal situation is different and needs to be analyzed on an independent basis. First of all, all sides need to keep a more civil tongue.  Name calling, labeling, insults, etc, have no place in this matter and we should try to address these issues in a careful and considered manner. I for one will not engage in this behavior nor try to keep up with Mr. Riddick's tactics.  He has made many derogatory comments about me and Matthew Chan on posts on this site and in private emails to us.  He has questioned my abilities and my motivations and I will not grace his comments with a similar reply. My reputation speaks for itself and the scores and scores of people we  have helped in the digital image arena for very little money are enough testament to my motivations. In fact, my motivations for being involved in this are spelled out on the home page of this website. In repeated emails to those who he believes infringed on his intellectual property, he often talks about how much intellectual property lawyers cost and how expensive it would be to litigate these matters or  try to get a lawyer to even respond to his claims. So how would I, a partner in a litigation boutique in NYC, be in this for money by charging $150 for a letter and $150 per hour for litigation? Just google my name and you will see some of the high-profile cases I have been involved in all areas of litigation. It makes no sense to claim that this is a money-making scheme on my part. It makes even less sense to claim that money somehow motivates Mr. Chan, who created and moderates this site. He gets no portion of the $150 clients pay me for a letter to Getty and we just recently put up a paypal donation button (at the suggestion of one of the folks who posted I might add) which helps defray the costs of maintaining the site. Matt should be given credit for creating a forum for discussion of an issue that is of critical importance in the digital millennium and for giving information on that and other topics. Rather than attack him on his motives, point out if he (or I for that matter) has stated anything in error or falsely accused anyone of any impropriety. Lets try and stick to facts.

 A brief summary of Riddick's claims

Riddick is the CEO of Imageline, a Virgina corporation that apparently owns the copyright to a collection of clip art and graphic images. He has begun a campaign, similar to Getty's, of sending out notices to people whom he believes infringed on his intellectual property by digitizing the images into embroidery designs. Some of these folks then sell these designs and some people give the designs out for free on websites. He demands very high amounts for settlement and often asks the alleged infringer to sign over the designs to him for which he will "credit" them against their claim.  I have seen emails where he offers to give a $200 credit per design for example. He seems to rely on strong language and on the copyright law's allowance of up to $150,000 per infringement in statutory damages along with attorneys fees and costs. The effect of the email is to make the receiver feel as if they have very little option because the law is so cut and dried.  From the numerous posts and emails Matt and I have been receiving, it appears that many people are agreeing to his demands and that many are also very concerned about their businesses and their exposure.                    

Is Imageline correct?

Yes and no. Let's assume for the moment that Imageline has registered the clip art that someone has used to create a digital embroidery design. That use would infringe on Imageline's intellectual property.  It would not be a defense to the claim that the design was a simple one that anyone could have come up with independently (though his claim to owning flag designs needs to be examined more closely as flags are generally not subject to copyright, though a particular stylized version of a flag may be).  It would also not be a defense that the infringer did not know the design was copyrighted either because it did not contain a watermark or copyright notice or because the infringer paid fair market value to another entity for the design. The Copyright Act of 1976 does allow a registered copyright holder to collect statutory damages and attorney's fees as well as litigation costs in successful copyright lawsuits. The law does allow up to $150,000 in damages per infringement. That's the "Yes" part

The "No" part is that it is highly unlikely that a court will award that level of damage in most of the cases I have seen. The users ceased and desisted  in using the image once notified, did not make huge amounts of money off of the image and were "innocent infringers." Innocence plays a role in the damages portion of any copyright lawsuit. First of all, courts take that into consideration when assessing statutory damages. Second of all, the copyright law allows judges to reduce ALL statutory damages to $200 per infringement in cases of innocent infringement.  Courts often do that. In fact , courts have repeatedly done so in lawsuits brought by the RIAA over illegal downloading of songs. Any certainly people are more aware that music is copyrighted than they are aware that clip art is copyrighted. It should also be made clear that Imageline could not get both statutory damages and its actual damages.  It must choose one over the other. If it chooses its actual damages  then it would be entitled to receive the fair market value of a license for the use of the image PLUS recovery of the actual profits the user made off of the image. It could not receive attorneys fees and costs as part of actual damages.

Of course, in any lawsuit, the alleged infringer could implead (bring into the lawsuit) the entity that sold it the offending image    as being responsible for causing the alleged infringement.  

In any lawsuit brought by Imageline, it would first have to prove its ownership of the image (easy if it has registered it) and that the design involved actually came from that image or substantially came from that image.

What should one do if they receive an Imageline claim?

First, evaluate if the image they claim you used infringes on the image they claim they own. Is it substantially similar, Did they send you proof of registration of the image?

Second, figure out how, when and from where you acquired the image you used for your design. Contact that entity and forward them a copy of Riddick's communication asking them.

Third, ascertain how many times the design was used, sold given away.

Fourth, contact an IP attorney. Don't just rely on the information provided here. Have a trained set of eyes review Riddick's claim against you. Call a local IP lawyer and ask what his/her consultation rate is (many are free) You can find one by using your local bar association for a referral or by going on Avvo.com or lawyers.com.   I will agree to extend my Getty rate ($150 per hour) to this matter and will accept a four hour retainer to start).

Fifth, send an email back to Riddick advising him that you are evaluating his claim and considering retaining counsel. If you hire an attorney he can no longer contact you directly. Do not engage in a nasty back and forth with him as it will get you nowhere.

Will he sue?

There is no way to predict what a person will do.  If it is true as has been posted here by others that his corporation is in default on some issues, then he will have to correct those issues before he can sue. He will generally have to sue you in your home state as it might be difficult for him to get jurisdiction against you in his home state. The suit would be brought in Federal court.  

 If you don't want to get a lawyer, the law allows you to represent yourself.

Conclusion

The best approach for anyone receiving one of these claims is to review the posts on this site and familiarize yourself with the issues. Refrain from a back-and-forth with Riddick and get some legal advice from a qualified practitioner in your area.

I will be glad to address new posts on this and I will be emailing this directly to Mr Riddick as well to give him an opportunity to respond

[Matthew Chan]

Oscar,

Thank you for taking the time to post your position on the Riddick/ImageLine Controversy.  Many people have been looking forward to reading it.  As always, it is well thought out and well written.  Like you said, it is simply best not to engage in the same type of conduct as Mr. Riddick.  His latest emails to us was quite disparaging and off-base, it is simply best not to engage.

Now that you have made your position known and the terms of your legal services available, letter recipients can make a judgment call on what they should do based on the information and content we have made available.

As an added bonus to our readers and visitors, I can now announce that we will be having another edition of our phone interview where we discuss the issues and make commentary regarding this case.  As with our prior interview recordings, I expect this will be be a popular one and many people will want to download and listen to it.

Matthew

[GRiddick]

Hello Oscar and Mathew ... and any embroiderers who might be listening

I am really not used to debating subjects of this significance through a public forum like this, but since the editors of this site continue to post statements that are not accurate about me, personally, and about the way Imageline conducts its business, I feel in this case I have little choice.

Oscar's statement earlier today that Imageline routinely demands that people turn over their embroidery designs as part of all of our settlement discussions is simply not true. If you read the post below, you will find quite a few other things that Oscar and Mathew have told people seeking objective straight-forward advice that simply are not true.

It is also vitally important, in my view, that you understand that everyone we have approached in the embroidery industry, and in other industries as well, is a "reseller",or a "publisher", or a "re-distributor" of embroidery digital design files. Not simply an end user who made a design to embroider on a sweater for her uncle's retirement party.

By distributing unlicensed digital property, you can be held liable to not only Imageline, but to every single end user who downloaded the unauthorized design files from you (once they are discovered), whether that was a standalone sales transaction, as part of a "design pack" or "design set" as your industry refers to bundles, through a web site promotion or contest, or for free. In fact, we suffer even greater marketplace damages when our unauthorized digital designs are given away for free.

I think it is a disservice to you for Oscar, who knows better, to compare your cases to those "end user" cases he handles for the Getty Images letter recipients (such as Mathew's own case), or to compare your potential infringement liabilities to the statutory damages applied to college students and other casual end users as part of the RIAA's (recording industry) infamous anti-piracy campaigns. Imageline is the only large volume copyright holder we know who concentrates 100% of its anti-piracy efforts on these resellers and other middlemen ... not end users.

In other words, if you distributed one of our proprietary designs (regardless of whether or not you knew it was ours, or equally important, certainly not yours, in the first place) to 1,500 people over a 2-year period, the average infringement penalty you would pay Imageline under our standard settlement rate chart would be less than $5.00 per end user infringer. We release all 1,500 end users, and you, in our typical settlement agreement. Compare that to the $1,300.00 per end user infringer Mathew claims Getty is trying to charge him.

I have NEVER seen or read about a judge awarding the lower end of the statutory scale in a "distribution" case like the ones we pursue. And Oscar cannot name you any either. What he has told you is misleading. Ask a competent IP attorney who you know, or perhaps one that has done work for one of your friends or business associates. Doesn't the embroidery industry have associations that provide this kind of advice and related services to its members? That's always a great place to start.

Finally, I must explain to you one more thing. I asked Oscar politely to explain this to you and he has thus far chosen not to say a single word about it. It is VERY important and relevant to you. These claims are over and above any infringement claims that might be made against you.

There is a relatively new section of our copyright laws in this country which originated from the Digital Millennium Copyright Act (if you call October 1998 "relatively new", that is). In Section 1202 of the DMCA there is language that pertains to exactly what most embroidery designers and digitizers do to Imageline's proprietary digital vector files without any authorization from Imageline, whatsoever.

The second paragraph of Section 1202 essentially says you cannot remove any copyright markings, codes, or references that are embedded into the original digital files of a copyight owner. The first paragraph of Section 1202 states that you cannot apply your own false markings on any digital design you make from a copyighted image that belongs to someone else. Most of the infringed embroidery designs we have discovered thus far are marketed by the embroidery design "digitizer", "distributor" or "web site operator", who claims they own the copyrights to all of the designs on their web site and in their products. These statements and actions are false and misleading and have severe potential consquences.

Both Section 1202 provisions call for mandatory damages of between $2,500.00 and $25,000.00 per altered or falsely identified design. And the district court judge typically does not have the same decretion here as he/she has with standard copyright infringement damages. Why you have not been told this critical information by anyone other than me before now is a complete mystery to me. Be sure to ask your attorney.

I am sorry for the length of this e-mail, but if we do not point this out to you, then who will? Below is my answer to Oscar's post this morning.

**********************************************************************************************************************************************************************

Dear Oscar,

Overall, I think you did a really nice job on the document you prepared yesterday and submitted for posting to your “extortionletter” web site. Your advice for people caught in difficult situations going forward is clear, soft-spoken, and unambiguous.

I must take exception to your characterization of me and Imageline, however. While you seem to have approached the Getty Images issues with a well thought out plan, thorough research, and well-informed commentary, it is my view that your web site editors (presumably Mathew Chan) and you, personally, overreacted to the entire embroidery controversy, and did not handle this situation professionally at all. You know that this is an accurate, and fair, assessment now that some of the true facts are surfacing for the very first time among some of your readers and affiliated “informers”.

Why do you think the i-reports were forced off of the Internet? CNN knows when someone completely fabricates a story.

I never once questioned your “abilities”, Oscar, and I really do not appreciate the fact that you are now claiming publicly that I did. Your “motivations”, on the other hand, where Imageline is concerned anyway, are very much in question in my view. Imageline has fought for the “underdog” for its entire existence, and we have never once had any claims filed against us, copyright or otherwise, that were substantiated.

We have never yet had to file a lawsuit against anyone who was smaller than us, nor even close to our size, for that matter. It is your comments, such as “DO NOT SETTLE”, that lead to unnecessary lawsuits being filed, Oscar, not our aggressive attempts at trying to reach a settlement that both parties are reasonably satisfied with and participate in structuring. Don’t you think it is a bit self-serving for you to claim that business people are not smart enough to work out creative settlements among themselves on occasion?

We just seem to have a huge disagreement on one major fact. We believe that the correct way to curtail digital piracy is through strict and consistent enforcement of our current copyright laws in this country, and settlements that reflect the total extent of the unlawful distribution that has occurred, and release all truly innocent participants in the process. You apparently believe that the best way to achieve that objective is to look for legal loopholes (i.e. registrations issues) and to not hold re-sellers accountable for their unlawful actions. And then lobby to try and change our existing laws. Am I correct in this assumption?

In fact, we tried very hard to make the “slap on the wrist” resolution you seem to support work back in the early 2000s. Remember, we always deal with resellers and middlemen, not end users. We found, without a doubt, that all that approach did was further encourage those who might be inclined to infringe to repeat their actions time and time again. That suggestion (ask people nicely to take down the infringements and then go away) simply does not work with people who are making money by distributing the pirated goods. I wish it did, but it does not and we can prove it. Not many small copyright owners can, as they do not have the field experience that we do here at Imageline.

I am not sure either you or Mr. Chan is used to someone who might question what you are doing over the public “cyberways”. As a matter of fact, from what I read this morning, Mr. Chan has apparently once again reneged on his promise to his readers and decided NOT to post the e-mail response I sent to him over the weekend. Don’t you believe your audience deserves to hear both sides of this debate, Oscar? I sure do.

Anyway, here is where I believe both you and Mr. Chan made some very serious errors in judgment when you first learned about these disputes between Imageline and certain members of the embroidery design community:

1). You made the false assumption that Imageline might not own the images we identified as infringing.

2) You made the false assumption that these embroiderers were “end users”, and not “dealers” and “distributors” making money off of their infringing activities and subjecting hundreds, if not thousands, of their end users to potential liability for copyright infringement claims down the road, as well.

3) You made the false assumption that Imageline did not have professional legal representation that it uses in cases where settlements are not likely or possible.

4) You made the false assumption that there was some kind of “conspiracy” going on between Imageline and small embroidery companies, and totally criticized and defamed a very nice, intelligent, and honest young lady in the process. This was, and still is, shameful.

5) You made the false assumption that Imageline images could be obtained legally by these people from other sources, such as www.clipart.com, and others, and would therefore help support their claims of “innocence”.

6) You made the false assumption that Imageline did not register the bulk if its proprietary illustrations and designs with the U.S. Copyright Office.

7) You made misleading statements that our actions were more egregious than Getty Images, Jupiter images, and Masterfile combined, after questioning some of those companies as it pertains to criminal offenses and RICO violations. I wonder how often those misleading statements will come back and bite you, and potentially prejudice some of your current and prospective clients?

You continuously led your readers to believe that their actions will be considered “innocent” by the courts, when the fact is they are all engaged in the design and production business and either knew, or certainly “should have known”, that their actions were illegal. That is why the “non-willful” range for what you call “innocent infringers” goes up to $30,000.00 per independent infringement, Oscar, and is not somewhat “fixed” at the “exceptional” rate of $200.00, as you seem to imply in many of your postings.

And the thing that has us most concerned down here at Imageline is:

9) You seem to advise these readers to go out and destroy evidence from archive.org, their cache files, or wherever, that their web sites, indeed, once displayed and distributed infringing materials, and you give them this advice AFTER they have received official notice of copyright infringement from Imageline, and presumably others as well. Isn’t that encouraging people who are not yet even your clients to destroy evidence, Oscar? Last time I checked, even lawyers were not allowed to do such things in this country.

In closing, let me tell you this directly rather than you deciding to post yet another erroneous, unsubstantiated, anonymous comment from one our your readers who has been caught infringing and distributing stolen property.

I am pleased that some of these people might hire you, or a competent intellectual property lawyer in their own communities, as their legal representative. We ALWAYS advise this. We are almost always better equipped to discuss these violations, and their potential consequences, rationally with someone who understands the law and takes the time to truly understand the facts behind each of our claims. Did I tell you we have never had a claim thrown out of court for being frivolous and/or mis-represented?

I don’t dislike you, Oscar. This is not personal. Nor do I think you are not an excellent attorney. I do think Mr. Chan is misguided, totally obsessed with his own personal issues with Getty, and out of his league, and I can assure you I am not the only one who feels this way, as well.

I am simply trying to tell you that you rushed to judgment in these embroidery cases, and I think, consequently, both you and Mathew have done a real disservice to a group of people who may not know any better, and could really benefit from SOMEONE telling them the truth.

Again, I appreciate the mild manner in which you worded most of the substantive part of your posting on www.extortionletterinfo.com last night.

Perhaps we will be able to figure out how to work together to resolve some of these disputes in a friendly and professional manner.

Sincerely,

George

George P. Riddick, III
Chairman/CEO
Imageline, Inc.

[Matthew Chan]

George,

I am going to make some brief statements here.  Just realize your days of getting a direct response from me is soon coming to an end.  You have been given one free pass (for the moment) to air out your laundry.  Either you will "get it or don't get it".  One way or another, I (like so many others) will not waste any more time arguing (or debating) with you.  It is unproductive and simply not a good use of time.

1.  I initially ignored you and your company because it seemed out of the norm of what we report until I got multiple copies of your "aggressive" emails and read them for myself.  After reading a few, I felt they qualified as being "extortionistic letters" and seemed to focus on preying upon small parties.

2.  Your emails are far more damaging and incendiary than anything I could ever say or write. They really do speak for themselves.  All your legal arguments mean very little in light of such aggressive and insulting behavior.  As I said, you may have some legitimate legal arguments but it is OVERSHADOWED by your appalling conduct.

3.  I did not publicize your email to me because you wanted me to publicize it.  You sir, do not dictate what I do or don't do.  I owe nothing to you.  This well-read website does not and will not serve as your personal message platform for your rants and raves.  Go do it on your and other people's websites.  

4.  You do not own or manage this website or discussion forum.  Any message you put up is subject to being deleted.  This discussion forum will not serve as your personal message platform.  As such, you are not entitled to any rights here. You can set up your own discussion forum elsewhere and post your complaints there.  As I said, you got one free pass for the moment since it is your first public post.  Do not be surprised if your future emails and posts are disregarded.

5.  You have made MANY disparaging and insulting written remarks about me, my qualifications, motivation, behavior, and the like.  You have also made several negative slants against Oscar.  This is quite consistent with practically all the emails you have sent to others. I have not said much about it but just realize that I am watching what you are saying about us.  I would say, just realize you are provoking the wrong person.  I recommend you "chill out".

6.  Have you done some self-reflection and thought about why so many people now despise, ignore, and have venom towards you?  This is not fiction.  Comments throughout the Internet corroborate this.  A simple Google search reveals many of them.  Your comments about how "we" are misleading people shows how little credibility you have at this point.  

7.  There has been an amazing amount of negative energy relating to you and ImageLine that I find quite unpleasant. The only saving grace is the amount of goodwill and gratitude being shown as a result of simply publicizing your emails.

8.  Your are attributing far more claims to me than truly exists.  I have kept specific advice to a minimum.  You keep saying "Matthew said this... Matthew said to do that... Matthew made this assumption...  Matthew did that...".  If you look closely, you will see that the totality of what I have written thus far does not come close to matching the overwhelming quantity of text you have churned out in your emails to us and others of your "grand plan".  It is staggering to me the amount of text you have been able to write.

9.  The truth is if I wanted to get dragged into an ongoing dispute with you, it would generate so much Internet traffic, it would become "sensational".  People simply love reading this kind of stuff.  Yet, you continue to feed the frenzy by your ongoing emails, and now this public post, and you wonder why people are responding to you as they do. I suspect you will continue on and not listen to anyone that dare challenge you.  Just realize, the cat is now out of the bag on how you operate.

At this point, I confess in the short time I have reported on you and ImageLine, I am mentally exhausted.  The time is coming close when I will be closing the spigot of incoming dialog on this case where I will go to "ignore mode".  You can continue to complain and gripe about my qualifications, age, experience, intentions, integrity, motivations, patriotism, "wannabe" status, "sensational reporting", or whatever seems to enter your brain at any given moment to someone who will actually listen and believe you.  But just realize, I am watching and I am listening. And so are the hundreds of passionate readers of this website.

I strongly suggest you conduct yourself accordingly.

Matthew Chan
Publisher/Editor

[GRiddick]

Please do not threaten me, Matthew. I suppose you prefer for your victims to simply lay down and let you "rant and rave" about them and their integrity and you cannot handle it when the spotlight is turned your way. That is a clear sign of your inexperience and immaturity, as well. Most true journalists I know have a strong backbone, and thick skin, and do not threaten people who are simply telling their readers the truth.

Cutting off people with opposing points of view is the quickest route to isolation of both you and your web site participants from my experience. I certainly would not handle things that way. Like I said before, neither you nor Oscar seem to know what to do with someone who does not fit into your "adoring fans" classification.

That's certainly one way to make yourself out to be something you are not.

Respectfully,

George Riddick
Imageline, Inc.

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PLEASE REMEMBER IT WAS YOU AND OSCAR WHO DECIDED TO POST OUR PRIVATE E-MAIL EXCHANGES, NOT ME. I AM SIMPLY FOLLOWING YOUR LEAD. STAND TALL, MATHEW. IF WHAT YOU SAY IS TRUE, YOU HAVE NOTHING AT ALL TO FEAR.

A note of clarifcation to Oscar and Mathew.

I will tell you straight up, Oscar, I am really frosted at you. There is no way this “mass confusion” and “mass dissemination of false information” could have spread like wildfire like it has done throughout the embroidery community had you not gotten involved and mislead these people by giving legal advice to a large diverse group of people through a public forum.

How can you honestly look anyone in the face and say that your advice of "DO NOT SETTLE" and "DESTROY ALL OLD ARCHIVED FILES" is NOT legal advice? I think it is shameful. You can be as pleasant as you want to pretend to be now, but the damage has already been done. This is not the way a professional attorney would have handled this mess, in my humble opinion.

Now we even have Mathew threatening me, and vowing to cut off my posts, for trying to tell your readers, and followers, the truth.

You rushed to judgment and practically everything you said publicly about me and Imageline was flat out wrong.

You owe a whole slew of people a huge “I’m sorry”. Perhaps you and Mathew should consider refunding any money they have given to you to try and at least be fair.

If I wasn’t directly involved with this, I would think I was watching some sort of bizarre science fiction movie, or perhaps a comedy. What you have done to this embroidery design crowd is shameful, in my opinion, and I am putting that as mildly as I can.

What are you trying to do here? Fabricate an exciting story? Incite a riot? It is almost as if you stood on the balcony with your arms around your first lieutenant, Mathew Chan, gave an impassioned speech about the evils of all things Riddick and Getty, and others in the western world, whipped the crowd into a frenzy, and then retired back to your parlor to play “spades” and drink vodka with your legal buddies.

Don’t you realize that these embroidery designers and digitizers take every single word that you and Mathew utter as complete gospel. All you see on some of the Yahoo and other embroidery chat groups that have now picked up this ball is 'Oscar said this' and 'Oscar said that'. The terms Oscar, RICO, Chan, FBI, extortion, conspiracy, “innocent” infringer, piracy, archive.org, and jail time seem to go hand in glove in the embroidery world these days.

It is my view that what you are doing now, and have done for some time now, facilitates and encourages ongoing willful copyright infringement in the marketplace. I read this morning that if an embroiderer simply returns a counterclaim “excuse” letter to their ISP, they can re-post their infringing embroidery design files without any further risk. What? It was attributed to some “united” legal advice the embroidery group was now getting.

Who ever told these people their distributors and the web site companies that host, display, sell, and download their infringing design files are protected by the DMCA “safe harbor” provisions. I have never heard such nonsense in my life.

I wonder where the embroiderers in the southwest and midwest got the notion that if they could just figure out how to make more than $200.00 on a design they infringe that they could do no worse than break even if they were sued. What?  Yes, and according to one post, the more you steal the better.

I wonder who is giving these people that notion?

For all I know, you and Mathew are sitting up there and doing absolutely nothing these days. But your name is used routinely out here in the public where wide scale infringing activity continues every single minute of every single day. Perhaps your time would be better spent if you concentrated on going after the top seven (7) embroidery design companies in the country. You would find that each one of them run regular, well-organized, well-funded, copyright infringement operations, and schemes, and have done so for years. No wonder all of these small embroidery companies and individuals are totally confused.

I have told you already that 95% of our anti-piracy efforts (and discoveries) involve these large publishing and embroidery design companies (not small embroiderers), but I think you feel more like some kind of hero by completely ignoring that reality and making yourself out to be “the champion of the little people”. Perhaps you are putting a bit too much Getty into your tea these days.

I also found out this morning that some of these people are now copying a picture of me that your “professional” cohort, Mathew Chan, has allowed to be posted on your web site, and are using it as a dart board. What does that have to do with your stated mission, Oscar? You are turning your web site into a circus.

Are you proud of yourself, Oscar? Is this what you worked so hard to achieve in your career. Would you teach any of your students to do their important legal work in this manner? It may take several decades to build up a good reputation in your field, but I can assure you in only takes a couple of months, or perhaps even weeks, to completely destroy one.

To summarize my thoughts, I am shocked by what I see coming out of both you and Mathew ... or at least many of your loyal followers and readers are presenting it that way.

Please set the record straight and tell these people the truth.

George Riddick
Imageline, Inc.

[Oscar Michelen]

Let me briefly respond to some of George's comments:

(1) How can you honestly look anyone in the face and say that your advice of "DO NOT SETTLE" and "DESTROY ALL OLD ARCHIVED FILES" is NOT legal advice?

I told people to hold off on settling until I had a chance to review the situation and your claim. My post, above, shows what I am telling people their options are "DO NOT SETTLE" is not in the post. Neither is it destruction of evidence for people to remove allegedly infringing images from the Wayback Machine. It is an attempt to make sure no further infringement occurs. I would think you would support that.  

(2)You rushed to judgment and practically everything you said publicly about me and Imageline was flat out wrong. You owe a whole slew of people a huge “I’m sorry”. Perhaps you and Mathew should consider refunding any money they have given to you to try and at least be fair.
 
First of all, I have not received any money from anyone on this issue and I don't believe Matthew has either.  Our main objection to your situation was the tenor and tone of your emails.  Just read Matt's posts and you will see that this is the main gripe that started his interest in the issue. The tenor and tone of this latest post of yours hardly dispels the notion that you relish personally attacking folks even when you are discussing legal issues.  You cannot stick to the topic and must engage in these nasty  personal swipes. My post was an objective analysis of the legal position I was discussing and I stand by it.

(3) All you see on some of the Yahoo and other embroidery chat groups that have now picked up this ball is 'Oscar said this' and 'Oscar said that'. The terms Oscar, RICO, Chan, FBI, extortion, conspiracy, “innocent” infringer, piracy, archive.org, and jail time seem to go hand in glove in the embroidery world these days  

I cannot help if people are quoting and misquoting what I say on this website. But don't you have to wonder what it is about your conduct and language that raise people's ire up to this level. Even Getty, which in my opinion is on less firm legal footing than Imageline, doesn't produce the stream of angry diatribe that this issue does.

(4)   I read this morning that if an embroiderer simply returns a counterclaim “excuse” letter to their ISP, they can re-post their infringing embroidery design files without any further risk. What? It was attributed to some “united” legal advice the embroidery group was now getting.    

That is not even remotely close to anything Matt or I said on the website and I hope that people are smart enough to look at the original post and see what my position was.  Anyone re-posting a design after there has been a claim made against it risks a high damage award. That another party may have done the infringement for you is neither a defense to liability nor  a license to keep using the allegedly infringed image.

(5) Who ever told these people their distributors and the web site companies that host, display, sell, and download their infringing design files are protected by the DMCA “safe harbor” provisions. I have never heard such nonsense in my life.

 I agree and have often discussed how the DMCA does not apply in these types of cases on posts related to the Getty issue.

(6) I wonder where the embroiderers in the southwest and midwest got the notion that if they could just figure out how to make more than $200.00 on a design they infringe that they could do no worse than break even if they were sued. What? Yes, and according to one post, the more you steal the better. I wonder who is giving these people that notion?

That is not even remotely close to anything Matt or I said on the website and I hope that people are smart enough to look at the original post and see what my position was.  Courts are "allowed" though not required to reduce statutory damages to $200 but only in cases of innocent infringement. Also, it is $200 per infringement, so the more infringements, the more damages you would pay, even at a reduced rate. I certainly did not give people that notion and am glad that you are letting me know of some of these misconceptions that are out there. If you want to send me the links, perhaps I will consider responding to the posts to clarify that we are not saying these things.

(7)  I have told you already that 95% of our anti-piracy efforts (and discoveries) involve these large publishing and embroidery design companies (not small embroiderers), but I think you feel more like some kind of hero by completely ignoring that reality and making yourself out to be “the champion of the little people”.

I am only concerned with the 5% (as you claim).  They need to be treated differently George and much of the nasty email I have seen coming from you is sent to these Mom and Pop end-users.  I would not support and would not offer any discounted legal assistance to distributors, if they are repeatedly re-selling someone else's intellectual property. Certainly they would not be found to be "innocent infringers" so my position would not be applicable to them.  

( I also found out this morning that some of these people are now copying a picture of me that your “professional” cohort, Mathew Chan, has allowed to be posted on your web site, and are using it as a dart board. What does that have to do with your stated mission, Oscar? You are turning your web site into a circus.

What am I to do about how people use your picture George? We did not post that image, it was first posted on another unrelated site and then someone put it up on our site. How is a poster putting a picture of you on our site turning it into a circus?  Are we editing it in any way?  Are we allowing folks to download a dartboard with your face on it?  You are the one who told me they were doing so.  No one on our site ever suggested it or even advised us that someone did that. This is an example of how you feel obligated to make negative swipes at  people and not just stick to the issues.

(9) Are you proud of yourself, Oscar? Is this what you worked so hard to achieve in your career. Would you teach any of your students to do their important legal work in this manner? It may take several decades to build up a good reputation in your field, but I can assure you in only takes a couple of months, or perhaps even weeks, to completely destroy one.

Not that I have to answer to you, but Yes I am very proud of the work we have done and continue to do on a daily basis through our site.  We have provided a forum for folks to try and better understand the use of digital imagery in this new millennium.  There are many misconceptions and many sophisticated people are taking advantage of little businessess with no experience in this field.  I would note that your post did very little to attack my position it just changed some of the issues as I discussed. My law school students know all about this issue and all of the other cases I get involved in. They are very appreciative that their professor is not just someone in the ivory tower of academia but a practicing litigator whose real life experiences add depth to our discussions.  But substitute your name in your question and ask it of yourself.

(10) You made the false assumption that Imageline did not register the bulk if its proprietary illustrations and designs with the U.S. Copyright Office.

 I believe I made the exact opposite assumption.  The discretionary $200 reduction of damages only applies to statutory damages and statutory damages only apply to images registered at the time of the infringement. So clearly, I was dealing with Imageline's claims from the belief that the images were registered. Now of course you know that if you registerd them as collections and not individually, then if someone was to use 1 or 111 of the images simultaneously from one registered collection, that would amount to only one infringement.

(11) I have NEVER seen or read about a judge awarding the lower end of the statutory scale in a "distribution" case like the ones we pursue. And Oscar cannot name you any either. What he has told you is misleading.

I cannot name you one but I was not talking about distributors, but only end users as I said in my number (7).  And you cannot show me a case where an end user innocently used one item and the court did not reduce the damages to $200 or so.  Take a look at the cases filed by the RIAA over downloading of songs for proof of my position. CIte a case to me that supports your damages suggestions.

(12) There is a relatively new section of our copyright laws in this country which originated from the Digital Millennium Copyright Act (if you call October 1998 "relatively new", that is). In Section 1202 of the DMCA there is language that pertains to exactly what most embroidery designers and digitizers do to Imageline's proprietary digital vector files without any authorization from Imageline, whatsoever.

Of course I am familiar with the DMCA and its provisions, but we never discussed it or were asked to discuss it.  Obviously, if companies are removing copyright notices or watermarks found on digital imagery, then they face the full brunt of the law and deservedly so. How would they ever be able to claim "innocent infringement" if they're taking off watermarks? One of our biggest gripes against Getty is that they did not attach watermarks or copyright notices to any of their imagery.  I even point out in many posts that the lack of a watermark or copyright notice is not a defense to infringement, but it helps to establish your innocent intent in using the image

(13) You apparently believe that the best way to achieve that objective is to look for legal loopholes (i.e. registrations issues) and to not hold re-sellers accountable for their unlawful actions. And then lobby to try and change our existing laws. Am I correct in this assumption?

Of course not. I have never supported or represented anyone through this website that was accused of re-selling or re-distributing digital imagery. Everyone who has hired us through this site was either an end-user or a web developer who developed a site for an end user who unknowingly used an image. I do not consider it a legal loophole to highlight parts of the Copyright Law that are favorable to people in certain situations. While I believe everyone deserves legal representation, I would not offer a discounted (nearly pro bono) rate to someone who was re-selling or re-distributing someone else's intellectual property.  If that is who you are going after, then you will have no beef with me other than perhaps the tone of your emails. I am indeed trying to change existing US law to mirror UK law in that the UK law specifically says that in cases of innocent infringement, there should be no damages awarded as a matter of law if the party ceases and desists after receiving notice from the copyright holder.

Conclusion

I agree with Matthew that I do not really want to extend this dialog into a continuing forum of your issues. I have stated my position, I have clarified much of what you have asked about (if I left out a point or two, its not that I agree with your statement or that I ignored it, I just simply have to move on here.)  I ask that folks interested in this issue, read all the posts here and not misquote any of the parties.

[GRiddick]

Oscar,

I am VERY pleased by what I read on this post tonight. You truly handled these questions, and my aggresive tone, professionally. I appreciate that. I do not believe we are anywhere near as far off on our philosophies as I originally concluded. I love the Internet, and e-mail, but on ocasion it has led to an extended mis-communications from my experience.

Thank you for taking the time to post your reponses. It is very late tonight, but I will show you tomorrow where I think we mis-communicated and I'll bet we both we will feel a little better about what we are trying to achieve.

George

[GRiddick]

Hello Oscar,

We are not that far apart in our views. We both fight hard for the lowest level of “victim” in our system, people who often do not know how to best speak for themselves. In our case, it is the individual digital graphic artists, designers, cartoonists, digitizers, programmers, and animators. In your case, it is the unsuspecting “end users” of copyright-protected visual content.

I tend to agree with you where truly innocent actual “end users” are caught using content they had no idea was protected by registered copyrights for their own personal use. We have consciously chosen not to go after such end users over the years. 100% of our compliance and enforcement efforts are against those people who either publish our content, pretending it is theirs, or re-distribute the pirated digital content to others, sometimes in the dozens, but more typically in the hundreds, and even thousands, over the Internet.

It is also very common among these embroidery companies to offer digital designs that they did not have to pay for (such as those “borrowed” from Imageline) as incentives for people to subscribe to their monthly services, in which case tens of thousands of end users could end up with the unlicensed Imageline designs in a matter of months, if not weeks … or even days. What does that do the perceived market value of our designs?

So, do you now see what our dilemma is? How do we stop the cascading damages caused by the people who have contacted you because we contacted them? The most valuable thing we offer them in our current settlement agreements is a complete release of them, all of their business associates, all of the advertisers and sponsors, as well as the hundreds, or thousands, of their end user customers who are now using our copyright-registered digital designs against the copyright laws of this country. And have potential future claims against the original infringer, as well.

In short, our settlements give these dealers, distributors, and counterfeiters what even a court order typically does not. Peace of mind that they will not be brought into additional copyright infringement related cases down the road, and the satisfaction of knowing that they can put this chapter behind them and begin anew. Most people we settle with become our friends. In some cases, we even end up doing some business together. In spite of what you hear from people who are still trying to dodge us, and deny their wrongful acts, we try hard to be fair.

The truth is, Oscar, that when you consider the extent of the unlawful distribution we typically have to deal with, our settlement offers are extraordinarily reasonable. We will likely never get much of this “toothpaste” back in the tube. The damages have been done and will show up where we least expect them to for years and years to come.

As you will soon find out if you have not done so already, the vast majority of these embroidery infringers, re-publishers, and distributors, will tell you that some software company or web site operator gave them authorization to distribute the digital designs they create from our proprietary property. We have found in 98% of the cases we have reviewed that it is actually the original infringer who has misinterpreted the license agreement they agreed to follow. Why does all of that kind of licensing rights analysis appear to be a little self-serving to me? Of course, we pursue anyone would actually try to grant such rights to third parties, as well, as we have NEVER given anyone that authorization in our 25+ years in existence.

Think about this, Oscar. What if we decided to listen to you and Mathew and took ALL settlement offers off the table and turned all of these cases over to the attorneys who specialize in this sort of thing. Can you honestly tell anyone they would likely get a better deal and not spend significantly more money in the legal process, even with you offering a reduction in your hourly fees? Remember, these are distributors, not end users. You tell me what you suspect the average judge or jury would do to someone who distributes other people’s property into their markets for profit, and in volume.

What is the purpose of forestalling all settlement talks? I simply do not get it. If the theory is we will not follow through, I have told you this consistently. Yes, we will. We changed our policy several years ago and we now follow through on every single case that involves a dealer, re-publisher, or distributor, just as you have said you would do, as well, if you were in our place. Mathew would too if his e-books were what was being stolen and re-distributed.

The letters that Mathew posted online were ALL sent to these re-publishers, dealers, and distributors. I admit I became quite agitated that they did not have the courtesy to even respond to our serious claims. Our sense of urgency was necessitated by the fact that ongoing infringing activity among their end user customers was continuing in the marketplace, even after they had removed our designs from their own web sites. You should understand that kind of frustration. None of those we contacted are actually end users, but I get the feeling that they may have positioned themselves to you and Mathew as such. This includes the young lady in New York we talked about you possibly representing, as well. I’d be happy to provide some more details to you here if you think that would help.

Further, the anonymous and even identified embroidery industry participants in your interactive discussion forums are ALL Internet-based distributors, dealers, resellers, and/or re-publishers, as well, from we can tell.

Before I forget it, I would like to compliment you on pointing out to me the anti-piracy objective of your instructions to remove web pages from the Archives.org historically mirrored web sites. I honestly had not thought about that rationale. I think you would agree that the correct procedure for someone who has been officially noticed that these infringement issues could easily end up in the courts is to remove all old web pages that include infringing designs from all known sources, and then retain electronic and/or print copies of these web pages in their business files as potential evidence that could be needed during discovery. Don’t you agree?

And, finally, please remember this. Unlike truly innocent and unaware end users, these people who are re-distributing and sub-licensing other people’s work as their primary business model do not respond to anything other than very aggressive communications. You know that. I could show you hundreds of techniques we have used over the past 15 years or so, and the aggressive ones are the ONLY ones that get anyone’s attention these days, short of filing a federal lawsuit without giving any notice at all.

What exactly is it that you and Mathew are trying to get me and Imageline to do, Oscar?  Drop all settlement offers? File hundreds of lawsuits? Ignore the cascading infringement activity that still place in the embroidery marketplace due to original infringing activity of those we do pursue? Ignore infringing activity? Stop producing new copyrighted work altogether? Contribute all of our work to the “public domain”? Why have you decided to aggressively attack me, personally, and treat our small graphic arts content development company that has stood up for the little guy for all these years as the “bad guy” here?

Again, I was very pleased to learn last night that you feel the exact same way about people who use other people’s property to distribute wares to their customers, and pretend that it is their own, or that they have somehow secured such distribution rights.

Please let me know if I misunderstood your position in any way. I don’t think that I have.

Have a pleasant day.

George

George P. Riddick, III
Chairman/CEO
Imageline, Inc.

[bullyriddick]

sorry for interrupting this discussion but I have a feeling George that if you sent a letter that you just posted instead of horrible threats in your first email to your victims, you just might have a much bigger success rate in reaching settlement with them. You would also skip being ridiculed on several web sites and skip having your picture as a dart board in embroidery companies around the US. What I see here is Dr. Jekyll and Mr. Hyde type of personality, fair and polite in public and terrible and bully in private emails.

You are wrong on one thing George - aggressive techniques do not work. The result of your aggressive techniques is seen all over Internet and all it got you is resistance, condemnation and ridicule. Now, that people are organizing and creating rings there is no way back. Either will you change your language and try in nicely worded manner explain your situation (like you just did above) or you will do it hard way like you did so far. It's your choice.

And do not blame this site. This site is the last resort for many people who did not know how to deal with your obnoxious threats.