Defending Against Photograph Copyright Troll Infringement Cases
By Darin M. Klemchuk
Generally, these cases begin with a demand letter demanding a large “fee” for the use of an allegedly copyrighted image along with a threat that if a settlement is not reached quickly the infringer could be liable for substantial statutory damages as well as attorney’s fees. Because the alleged infringer must pay its own attorney’s fees plus risk paying the troll’s fees and damages, these points provide a troll with significant settlement leverage at the onset. Having defended several of these claims, here are some steps that can be taken to mitigate risk and hopefully resolve the dispute:
Step 1: Document and Preserve all Relevant Evidence — Avoid spoliation issues that can arise if the offending image is taken down by making a copy of the website page as well as the image, researching how the image was originally found and used, determining whether a vendor was involved in use of the image that may owe indemnity, obtaining information showing when the image was first published and which URL(s), determining traffic to the URL on which the image was published, and determining if the image and the URL hosting the image was involved in any kind of sales or ecommerce.
Step 2: Cease Use of the Offending Image — After relevant information is preserved, consider removing the image. The cease-and-desist letter typically points out that removal of the image will not remedy past infringement. But removal can be used to limit future potential damages (assuming there is actual liability and damages) as well as demonstrate show good-faith behavior, which can be important later to defend against a claim for attorney’s fees.
Step 3: Request a Copy of the Copyright Registration, Deposit Specimen, and Attorney Authority — As with an intellectual property claim, it is prudent to confirm the chain of title for the asserted IP, so requesting a copy of the copyright registration, deposit specimen, and attorney authority are good initial steps. Most cease-and-desist letters include this information at the outset. The registration in a copyright case is critical to whether a lawsuit can be filed and also whether the rightsholder can recover attorney’s fees and statutory damages. If the alleged infringement began before the registration, attorney’s fees and statutory damages generally cannot be recovered.
Step 4: Offer a Reasonable Amount to Settle — An early settlement reduces litigation costs and the hassle of defending a lawsuit. It also establishes a pattern of conduct that may be helpful later if litigation ensues, the alleged infringer is found liable, and a judge is considering a motion for an award of attorney’s fees.
Step 5: Do Nothing — At this point, relevant evidence has been preserved, the alleged infringement has been taken down, and a reasonable settlement offer has been communicated. In most cases, either settlement negotiations will continue or a lawsuit will be filed. Having taken these actions, the ball is now in the rightsholder’s court.
Step 6: If a Lawsuit is Filed, Consider Making an Offer of Judgment Before Filing an Answer — If a pre-lawsuit settlement offer is rejected, an Offer of Judgment under Federal Rule of Civil Procedure 68 can be made with the strategy that the offer inclusive of attorney’s fees, expenses, and liability is at a higher amount than the plaintiff can later recover. If not accepted, this potentially opens the door to mitigating costs and even possibly recovering attorney’s fees later. Put another way, this starts a poker game. Defendants can also consider making more than one Offer of Judgment at a higher amount as the case proceeds. This can put substantial settlement pressure on a copyright troll plaintiff.
Step 7: Make Continuing the Lawsuit Unattractive to the Copyright Troll — Paying $5,000 to settle a case worth $500 plus $1,000 in attorney’s fees encourages more troll activity. While this settlement may be justified by the cost-benefit analysis to the defendant, looking at the bigger picture, these types of settlements make the troll business more lucrative.
In addition to the steps outlined above, taking discovery of past licenses and litigation could be ripe to generate facts supporting defenses. Another focus of discovery could be how the copyrighted image got into the public domain in the first place, how the image had its copyright notice removed, and how and when the troll discovered the alleged infringement. Efficient discovery coupled with a proactive settlement strategy can lead to an earlier and less expensive resolution.
For a comprehensive discussion on handling these cases, see the post Tips for Handling Photograph Copyright Troll Claims.
