Under copyright law, anyone who participates in the chain of displaying or distributing an unauthorized copy of a copyrighted work may be liable for infringement, even if they did not know about the copying. Online, this means that website owners are vulnerable to infringement claims over content on their sites. Given how easy it is to copy things online, and increasingly, how easy it is to find such copies, it was perhaps inevitable that “copyright trolling” would ensue.
The term “copyright troll” originally meant copyright owners who aggressively threaten litigation over online use of their copyrighted content in order to extract exorbitant license fees. The tactic is based on U.S. copyright law’s provisions for awards of statutory damages and attorneys’ fees to successful copyright infringement plaintiffs, which can result in litigation damages many times higher than the typical license fees. (Under the U.S. Copyright Act, statutory damages can be as high as $150,000 for willful infringement.) Most commonly, the troll is an agency that uses automated technology to mark and track online uses of photographs, but the tactic has been used for other forms of creative works as well, such as illustrations, animations, videos, news articles and texts.
In the early days of copyright trolling, agents used fully automated technologies to find the content online, send license fee demands, and process payments. We saw many such demands sent to our clients. In many cases, the allegations of infringement were not valid, often because the use was excused as fair use under copyright law. In such cases, we advised our clients to ignore the demands, and there were no problems. The business model of these early trolls relied on a high volume of return and very little time generating and processing claims, and they seldom followed up if the demands were ignored.
More recently, however, the types of demands we are seeing have changed. While trolls are still using automated processes to find online infringements, humans, often copyright lawyers, are involved in reviewing and sending demands, and they are aggressively following up. Thus, it is no longer safe to ignore these demands.
Recently, two of our clients have learned this the hard way:
Case # 1: Our client ignored several emails from an agent alleging that a photograph on its site was infringing. Our client’s site had been designed by a reputable web developer several years earlier. The client reasonably assumed the web developer had obtained the proper license for the photo, and believed the notices were fraudulent. But then the copyright owner filed suit, and the client reached out to us. Meanwhile, the web developer had been absorbed by successive firms. Our client was not able to find its original contract for the website design and we were not able to get any information to confirm how the photo was first obtained and posted on the site. Although the typical licensing fee for the website use would have been in the $1,000-$2,000 range, the client ended up having to settle for over $6,000, after spending almost $10,000 defending the claim.
Case # 2: An in-house member of a non-profit found a photo online and posted it to an internal page of the non-profit’s website. Three years later, the non-profit received a form letter from a copyright agent for a news organization which owns the photo. The initial demand was for $575, many multiples of the typical $95 fee the news organization charges for similar non-commercial use. The form letter acknowledged that if the site could show that its use was “non-commercial,” that might support a smaller fee. After the non-profit ignored these notices, the demand escalated to over $1400. At that point we were brought in to the case. We argued back to the copyright agent that our client’s use fit within their definition of non-commercial use and the license fee should be reduced to a more reasonable level of twice their normal non-commercial license fee. The agent rejected this argument, and dropped the demand only slightly to $1200. After some more back and forth, we were able to get the fee reduced to $600. Meanwhile, however, our client incurred several hundred dollars in attorneys’ fees.
Any business that has a website is potentially vulnerable to copyright trolling. As these two examples demonstrate, it is important to take demands from copyright trolls seriously and to deal with them promptly. Demands for fees escalate over time, and the trolls are less likely to agree to a reasonable license fee after they’ve sent multiple notices, and especially not after they’ve filed suit.
Equally important, website owners should take steps to protect themselves from infringement claims in the first place. Here’s what we recommend:
- Do not assume that any photo (or other content) you find online is free to use
There is a persistent commonly held, but false, assumption that content easily found online is available for anyone to use. Indeed, in one recent case, a federal judge mistakenly accepted a defendant’s argument that he thought a copyrighted photo was “in the public domain” because he found it online, and identified that as a factor in excusing the infringement as fair use. That judge’s ruling was promptly reversed on appeal.
In reality, almost all online content is protected by copyright, and you will almost always need permission to reproduce it on your own website. This will be true whether you are a commercial business or a non-profit entity. While copyright owners generally charge lesser license fees to non-profits, under copyright law they are entitled to require compensation for reproduction of their works, and any unauthorized use may render you liable for infringement.
- Do not assume that your unauthorized use will qualify as fair use
The copyright doctrine of fair use may protect some unauthorized uses from copyright infringement. Unfortunately, there is widespread misunderstanding of this concept as well. “Fair use” does not correlate to our normal layperson’s concept of what is fair, and there are no easy rules for what will qualify. While fair use can apply to certain non-commercial, editorial or educational use, this does not mean that any educational or non-profit entity is free to use copyrighted works without permission. Nor does it mean that giving credit to the copyright owner will excuse unauthorized use. Merely that your use is humorous or that you call it a parody also won’t automatically qualify as fair use. Fair use is actually a very difficult legal doctrine that involves looking at many factors, and in today’s copyright jurisprudence we are seeing a lot of court decisions that are inconsistent and unpredictable.
Before you decide you can use any content as fair use, contact us. While the cases are not consistent, there are some situations that will be clearly fair use or not, and we can advise you on the relative risks of going forward.
- Find the copyright owner and get permission
If you are looking for photos online, don’t just take an image from Google images or other search results. Use the information provided with the search results, or a reverse image search, to find the site where the image was originally posted. Contact that site and confirm that they are the copyright owner and can grant you permission. If you are suspicious, ask for their copyright registration number, and check it. Generally, it is safest to source images from reputable stock agencies such as Adobe Stock, Getty Images, Shutterstock, Erickson Stock, theispot, and the like. You can also check creative commons to find all kinds of content available for various levels of licensing.
When in doubt, don’t use the content, or call us at OW&E to evaluate.
- Obtain appropriate contracts and indemnification from your web designer
If you hire a vendor to design your site, make sure you have a written contract with that vendor. The contract should have a recital that the vendor has obtained licenses for use of any third-party content. Ask to see those licenses. The contract should also include a provision that the vendor indemnifies you against any claims that content provided by the vendor infringes anyone else’s intellectual property, including specifically, copyrights. Keep a copy of the vendor contract and the third-party licenses safely in your business files. You will need these to refute a copyright troll claim.
We can advise you on appropriate warranty and indemnity language to include in your vendor contracts.
- If you let others post content on your site, establish DMCA protection
As a website owner, you can be liable for infringement if you let your users post content to your site, even if you had no idea the content was infringing and even if your terms of service prohibit posting infringing content. There is a provision in the copyright law called the Digital Millennium Copyright Act (DMCA) that will protect you from such liability, but only if you follow the required DMCA process.
First, you must appoint a DMCA agent to receive copyright complaints. Your DMCA agent must be registered with the Copyright Office, AND contact information for your DMCA agent must be posted on your site. Second, when you receive an infringement notice (that substantially complies with the notice requirements), you must remove the allegedly infringing material from your site, and notify the user who posted it. If that user submits a counter-notice (that substantially complies with the notice requirements), you must restore the material, unless you receive notice from the copyright owner that it has initiated a lawsuit. If you comply with all of these requirements, you will be given a “safe harbor”, meaning you will not be liable for copyright infringement with respect to that material.
See https://www.copyright.gov/dmca-directory/ for more information, or call us at OW&E and we can walk you through the process. We serve as the DMCA agent for some of our clients, and that may be an option for you as well.
- Consider advertising injury insurance
There was a silver lining for our client in Case # 1: their insurance carrier ended up covering the claim. Many comprehensive general liability insurance policies include advertising injury under coverage B. In that case, our client tendered the claim to their carrier and it was covered under their advertising injury provision.
Often such insurance is expensive, and many of our clients have decided not to buy it. However, the cost-benefit analysis depends on your individual situation. Consult your broker to see if advertising injury coverage might be right for you.
- Do not ignore a copyright troll demand
If you receive a copyright troll demand, take it seriously. Unless it appears that the entire process is automated (e.g., you are asked to log on to a site to pay the claim), it would not be wise to ignore an infringement notice. On the other hand, it would not be wise to simply comply with an infringement notice and pay the asserted fee. The claim may not be valid (e.g., your use may qualify as fair use). Even if the claim is valid, the fee may not be reasonable.
We recommend that you consult us to evaluate the situation and determine your best strategy as soon as you receive a demand from a copyright troll. In our experience, a prompt rebuttal from a lawyer is the most effective way to get the claim dropped or the monetary demand significantly reduced.
Contributed by Linda Joy Kattwinkel