Intellectual property has become a hardball arena in recent years. Small businesses steal trademarks and trade secrets from each other. Patent trolls file serial lawsuits extorting money from busineses. Now we have copyright trolls.
A client was recently threatened with legal action by a stock photo company. This stock photo company sells photographs on-line for use in websites. Typically, a website owner or developer can download and use a photo for a royalty of $5.00 to $10.00.
My client had a stock photo on his website. He received a demand letter from a stock photo company that had the rights to sell licenses to use this photo. My client's website developer had downloaded this photo from somewhere (the developer was a little vague).
The stock photo company initially demanded $1,500.00 and threatened to take legal action if not paid. My client discussed the matter with the stock photo company which progressively lowered its demand to around $900.00.
The threat of legal action was serious. If you use a computer to download copyright protected art from a website and use it on your website, you can be liable for up to $150,000 in statutory damages, plus statutory attorneys fees, per download. So, the potential exposure was huge, even for a lousy stock photo.
The stock photo company had an entire division devoted to collecting large fees from companies that had used the stock photo company's photos without authorization. They searched the Internet with special software that looked for their photos and then checked to see if the use of the photos was authorized. If not, then they would aggressively demand outrageous fees and threaten legal action. Furthermore, the photos on the company's website were easily downloaded without payment of a royalty and watermarks were easy to crop out. The company essentially had a copyright troll division searching out the unwary using their cheap photos.
In my client's case, the photo on his website was not registered with the U.S. Copyright Office. Since it was not registered, the stock photo company could not collect the huge statutory damages but only actual damages, in this case about $5.00. My client removed the photo from his website and the stock photo company left him alone when we asked for registration information.
Lessons:
1. Do not use someone else's photos, pictures, videos, etc. on your website.
2. If you are a web developer, pay all royalties necessary for every bit of art on a website.
3. Ask you website developer for proof of a license for all stock photos or other art on a website. You will have to pay the price if the developer stole them.
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