Excuses, Excuses (Part 1)

When someone infringes your copyright, the infringer usually offers some excuse to try to avoid liability. Many of these excuses appear compelling on the surface, but they don’t stand up to the law. This is the first of several blog entries that identify some of the more popular excuses and what the law provides to counter them. Special thanks to Leslie Burns for her assistance with this list.

1. I didn’t post the photo ˗ my website designer did.

Ignorance isn’t an excuse to infringement, particularly when it’s your job to hire or otherwise supervise the infringer. If you hire a website builder who copies and displays a photo on your website without permission, then you’re “vicariously” liable for the infringement. The courts have held that “When a party has (1) the right and ability to supervise or control the infringing activity; and (2) a direct financial benefit from that activity, the party is vicariously liable for the infringement.”  See Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 418, 104 S.Ct. 774, 777 (1984).

For example, in Corbis Corp. v. Nick Starr, the court awarded the plaintiff more than $100,000 for the copyright infringement and attorneys’ fees. In that case, a small local business hired a web designer to build the business’ website. Because the web designer used Corbis’ photos without a license, the Court held that both the web designer and the business owner were jointly liable for the infringement.

2. I can’t be personally liable for the infringement because the photo was posted on my company’s website.

You can be personally liable for the infringement even when you’re operating your business as a corporation or LLC. For example, you’re Wally and you own Wally’s Widgets, Inc. If you use a photo without authority, you may be held personally liable for the infringement in several ways.

First, the photographer can “pierce the corporate veil,” especially if your company is owned by one or a few persons. It usually happens when you don’t keep the company and your personal assets separated or you commit fraud.

For copyright infringement, you may be personally liable for your company’s debts in two additional ways. As mentioned above, you may be held personally liable under the theory of vicarious liability. Alternatively, if you encouraged the infringing activity, you will be held personally liable under the theory of contributory infringement. Attorney Gina Carter defined this as acts by an officer or director such as “knowingly advertising an infringing use, instructing someone else to infringe, and actively and knowingly aiding and abetting a direct infringer in the infringement.” SeeIP infringement – avoiding liability for officers & directors,” Jan. 04, 2007. See also, Novell, Inc. v. Unicom Sales, Inc., 2004 WL 1839117, *17 (N.D. Cal. 2004)

3. I didn’t make any money from the infringement.

Making money from the use of a photo is irrelevant when determining whether the use was an infringement. If you reproduce, display, distribute and/or create a derivative work of the photo without authority of the copyright owner or the law, then you have committed infringement. See 17 USC §§ 106, 501. Once the infringement is established, then the amount of damages you must pay the copyright owner is determined by law.

If the photograph was timely registered with the U.S. Copyright Office, then the photographer is eligible for statutory damages of between $750 and $150,000. See 17 USC § 504(b) and (c). The photographer will get damages even if you lost money when using the image.

Making money from the use of the photo can increase the amount of statutory damages that you’ll have to pay. Courts consider: (1) the expenses saved and profits reaped by the infringer in connection with the infringements; (2) revenues lost by the plaintiff; and (3) whether the infringement was willful and knowing or whether it was accidental and innocent.  A&N Music Corp. v. Venezia, 733 F. Supp. 955 (E.D. Pa. 1990).

As the U.S. Supreme Court explained:

[A] rule of liability which merely takes away the profits from an infringement would offer little discouragement to infringers. It would fall short of an effective sanction for enforcement of the copyright policy. The statutory rule, formulated after long experience, not merely compels restitution of profit and reparation for injury but also is designed to discourage wrongful conduct. The discretion of the court is wide enough to permit a resort to statutory damages for such purposes. Even for uninjurious and unprofitable invasions of copyright the court may, if it deems it just, impose a liability within statutory limits to sanction and vindicate the statutory policy.

F.W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228, 233 (1952). “The purpose of statutory damages is not only the restitution of the defendant’s ill-gotten profits, but also to discourage wrongful conduct by imposing a high enough penalty so that defendants will realize that it is less expensive to comply with the law than to violate it.” 2 William F. Patry, Copyright Law & Practice at 1172.

Additionally, regardless of any profit-making, legal fees may be recovered from the infringer. 17 U.S.C. 505.  In fact, attorneys’ fees in copyright actions are “the rule rather than the exception.”  Micro Manipulator Co. v. Bough, 779 F.2d 255, 259 (5th Cir. 1985).

Even if the copyright is not timely registered, the photographer still is entitled to recover “the actual damages suffered by him or her as a result of the infringement [usually a license fee], and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.” See 17 U.S.C. § 504(b). Because courts want “to prevent the infringer from unfairly benefitting from a wrongful act, [the photographer may recover] wrongfully obtained profits resulting from the infringement . . . . These profits can be direct or indirect.” See Polar Bear Productions, Inc. v. Timex Corporation, 384 F.3d 700, 708 (9th Cir. 2004).

4. I didn’t know it was copyrighted.

A photograph is protected by copyright at the click of the shutter. If the photographer posts a copyright notice on or adjacent to the photo, then an infringer cannot claim that the infringement was innocent. 17 U.S.C. § 401(d).

But even if the copyright notice is not posted with the photograph, then you are still liable for the infringement. In essence, copyright infringement is a strict liability regime. “The standard rationale for excluding innocence as a defense to copyright infringement is that, as between the copyright owner and the infringer, the infringer is better placed to guard against mistake”; “the strict liability rule should discipline an infringer, who might otherwise mistakenly conclude that his copying will not infringe the copyrighted work, to evaluate the legal consequences of his conduct more carefully.” P. Goldstein, Copyright § 9.4 at 162 (1989).

5. The infringement was a mistake.

You didn’t have to intentionally or willfully infringer to be liable for the infringement. A mistake will not only not preclude liability, it may not be reasonable and willfulness could still be found by the court.  A defendant willfully infringes on the copyright of another by acting “with knowledge that the defendant’s conduct constitutes copyright infringement.”  See Peer Intern. Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1336 (9th Cir. 1990).  This “knowledge standard” does not require that a defendant act with the “specific intent” to violate the copyright protection.”  Coogan v. Avnet, Inc., 2005 WL 2789311 (D. Ariz. 2005), quoting Atlantic Recording Corp. v. Chan, 94 Fed. Appx. 531, 533 (9th Cir. 2004).

In Coogan, the court rejected the defendant’s argument that the infringement was not “willful” because it was merely the product of a mistake.  In that case, the defendant published photographs beyond the term of a license agreement and in a manner specifically prohibited by the license agreement. The court reasoned that the infringement was willful because “even assuming that Defendant’s mistaken belief as to the terms of the license was held in good faith, it was not reasonable.”  Coogan, 2005 WL 2789311 (emphasis added).

Stay tuned for the law’s responses to additional excuses.

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