Brokerage Ops the December 2015 issue

Making a Lasting Impression

In a drag-and-drop world, copyright infringement is easy—and expensive.
By Annmarie Geddes Baribeau Posted on November 30, 2015

Later, the organization’s president and CEO receives an intimidating email from the law office of Carolyn E. Wright, threatening a copyright infringement lawsuit potentially resulting in $150,000 in damages unless the matter is settled for $10,000 within 10 days.

This is exactly what happened last summer to The Council’s president and CEO Ken Crerar. In a word, he was incredulous. “We are really sensitive to copyright,” he says. The Council produces copyrighted material and charges a licensing fee, he explains. “We buy images all the time,” Crerar says. “It’s not that expensive.”

What was perhaps most unnerving is that the photograph of a non-descript cargo ship on the high seas was discovered after only 29 visitors—including 12 Council staffers—even saw it. Out of curiosity, Crerar found the picture online and learned it cost just $311 for a wider distribution. So he figured reimbursing the photographer $1,000 for the mistake was a reasonable solution.

The letter was sent by Leslie Burns, one of the lawfirm’s attorneys. But since it said “For Settlement Purposes Only,” its intent was clear. Instead of seeking compensation for the right to use the photograph, the photographer sought to generate income from a settlement.

Crerar had hoped to directly compensate the photographer, Michael Layefsky. But since he had legal representation, The Council’s attorneys had to work out a settlement through his attorney. Ultimately, The Council did settle for $4,500.

“Settlement brings certainty because you build into the agreement the release of the claim. You know it is over,” says Rachel Hofstatter, an attorney with Steptoe & Johnson, which represents The Council.

Layefsky declined to comment on what percentage of the settlement he received through Wright’s firm. Wright, who like Layefsky, is a professional photographer, centers her practice around photographers and the legal issues they encounter. She even calls herself “the Photo Attorney” on her company’s website (
As for Crerar, he wants The Council’s story told to warn members so they do not have to endure a similar experience.

A Growing Problem

The Council’s story could happen to any insurance brokerage that publishes material online or in print. In an age in which digital media marketers encourage social media sharing and every website owner is a publisher—whether they realize it or not—it’s easy to inadvertently post a copyrighted image online.

Copyright law can also be confusing, leading to common assumptions that could become quite costly. For example, attributing an image does not mean it is acceptable for use, since creators are not legally required to place copyright notices, such as the © symbol, on their materials. Also, “royalty free” does not necessarily mean free of charge.

Robert Fletcher, president of the Intellectual Property Insurance Services Corporation, says he is seeing a surge of businesses and their attorneys seeking to copy the strategies of patent-assertion entities by “acquiring copyrights for the sole purpose of asserting them against others for profit.”

They will always exist, Fletcher says, “as long as the cost of ligation is so high compared to the cost of settling. That is the driving force.”

Profit-driven copyright law enforcement is based on a business model that relies on a high volume of defendants, high litigation costs and quick settlements, says Brett Heavner, a Washington, D.C., attorney who specializes in copyrights and trademarks.

More plaintiffs are pursuing copyright infringement, Fletcher says, because copyrights are easy to obtain and infringement can be found without great effort through reverse imagining and field searching using computer programs or manual techniques.

“There are really no prohibitions about writing a threatening letter,” Fletcher says. “Here you can be pretty cavalier about the threats you can make compared to other countries.”
As efforts made by plaintiffs (also pejoratively referred to as Internet copyright trolls) are growing, the need for insurance protection against copyright violations is expanding, Fletcher says. Agents, he says, are contacting him because customers are clamoring for it. 

A Delicate Balance

Copyright law was written to give creators a way to protect their work, not to benefit copyright trolls, Fletcher says. Because the founding fathers wanted to encourage innovation, they included copyright protection—as well as for trademark and patents—in Article 1, Section 8 of the Constitution, says Diane Peters, general counsel for Creative Commons (CC).

The problem, Peters says, is that copyright law has not kept up with advancements in technology and is antiquated in the digital age. Creative Commons, a nonprofit, offers free copyright licensing to support creators wishing to share their works under less than all-rights-reserved copyright.

All content licensed by Creative Commons is free to use for non-commercial purposes. Creative Commons provides choices for authors who want to control their copyright on terms they establish, not default terms established by law.

Unregistered Copyright

To avoid being an infringer and being infringed upon, it is important to understand how copyright law works. Basically, anything created is copyrighted by law. Creators, Hofstatter says, are not required to register for copyright nor put a copyright notice on a creative work to protect it. But if the copyright owner wants to sue, the work must be registered.

“A cease and desist letter might assert copyrights that are not registered,” Hofstatter says, “and the parties might reach a settlement out of court even if there is no registration.”

Therefore do not assume that a creative work lacking copyright language or a symbol is acceptable to duplicate, Heavner says. “Under the law, all finished works have an implicit copyright,” he says, “which means the work cannot be used without the creator’s permission.”

Another pitfall is presuming that “royalty free” means the images are free to use. Hofstatter says it means there is no recurring fee for the use of the image—whether “the owner is allowing the licensee to use the image for no fee at all or the owner [is requesting] a one-time payment.”

It is also important to be wary of assuming it is acceptable to use an image under “fair use.” This is one of the “trickiest” aspects of copyright law, Hofstatter says. “Unless you are a media source or an educational institution, the question of what falls into fair use is so fact-specific—I get afraid that clients are going to rely on it too much.”

“In short,” Heavner says, “you should not download, copy, re-post or otherwise use any materials on the Internet without obtaining permission from the creator through an agreement called a ‘license.’ Once you enter into the license, it is essential you comply with the terms of the license.”

Licenses grant permission to use the materials only under specific terms, such as payment and attribution, Heavner says. They can also exclude specific uses, such as commercial or widespread distribution. Even when attribution is not necessary, works should be attributed as a matter of practice to avoid any hint of plagiarism, he adds. Hofstatter says any photo on the Internet is protected by copyright “unless it is in the public domain.”

There are different laws concerning public domain, Heavner says, but generally speaking if a work was first published before 1923 it is likely to be in the public domain as far as copyright law is concerned. “Attribution is not required,” Heavner says, “but it is a good practice anyway.”

Avoiding Infringement

To prevent copyright infringement, Hofstatter says, “The biggest thing is to be aware.”

First, check all publications, whether online or offline, to ensure copyright law has not been broken, Heavner says. Then remove anything suspect until appropriate permission can be granted.

Organizations, Hofstatter says, should develop a policy that includes language warning that Internet images may be copyrighted and may not be free to use. “It is always safest to assume the work is copyrighted and obtaining permission or a license is necessary,” she says. “Then you have started the education process, and you have to make sure everyone is aware of the policy. Part of this is about compliance. It is always going to be up to supervisors to say, ‘Show me the permission. Where did you get this?’”

The most conservative approach for avoiding infringement is to use “your own artwork or use nothing,” she says. Since this can be impractical, the other option is to procure images legally.
“Stick to Creative Commons licenses so you know you are safe,” Hofstatter says. The organization has developed licenses to encourage the sharing of images and videos. These licenses span a spectrum of choice, from allowing any use, even commercial, provided attribution accompanies the product, Peters says, to allowing only verbatim use for non-commercial purposes.
Many stock photography and other sites offer images with CC licensing. They include Europeana, Flickr, Getty Images, Google’s image search, Openclipart, Pixabay and Wikimedia Commons. Peters says the simplest way to find images with CC licensing is to visit Creative Commons also offers a browser through Firefox.
After clicking on the photo libraries of the websites, enter the photo subject and review pictures and their CC license. Always double-check that the work is under a CC license, Peters says, and check its versions, because there are differences between versions.

Most of the images or other downloaded content will automatically expose attribution and license information. However, this is a feature that requires additional improvement by platforms.

Cover Your Risk

According to CC’s website, the ideal attribution includes the image’s title, author, source, license and appropriate links. (Check the website for examples.)

The Council is strict about following copyright law, but last summer’s experience is a reminder that mistakes happen. The Council has insurance for such situations, Crerar says, but the settlement amount was less than the deductible.

“Any company that publishes on a website or any other media should consider purchasing media liability,” says Brian Dunphy, the senior managing director of Crystal & Company. Media liability is designed to cover advertising injury, allegations of libel and slander, and copyright infringement through media activities, Dunphy says.

In fact, Fletcher says, “Large numbers of agents and brokers do not know they and/or their clients need copyright coverage or any type of intellectual property coverage for that matter.”

Fortunately, most companies that publish online recognize they should have media liability coverage, he says, so demand is growing. Like media coverage, intellectual property coverage also protects companies that inadvertently infringe on copyrights but over a much broader range of activities and circumstances.

Fletcher sees a growing demand for intellectual property coverage since it covers two-way liability for copyright, patents and trademarks.

“We are changing to an economy where we create products of the mind,” he says. As a consequence, the insurance industry is being called upon to insure these products.
The most important thing to remember, according to Crerar: “Be careful about what you pull down from the Web. Whether it is written text or images, it is probably copyrighted.”

Annmarie Geddes Baribeau Contributing Writer Read More

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