How to Reduce a Copyright Liability from Major to Minor

A client recently had the good fortune to reduce its financial exposure for copyright infringement from $3 million to a little over $75,000. Still, $75,000 is a lot of money to pay for unauthorized reproduction of twenty photos that belonged to someone else. But on the down side, in addition to statutory damages of up to $150,000 per photo, there also was the possibility of an award of attorney’s fees, and because the facts as known pointed to the conclusion that this client was aware that the photos were not its to borrow, it was quite likely a jury would have found the infringement to be willful and would, and could, have awarded $150,000 per photograph. 

In digging into all the facts, we were able to establish that each of the photos, while registered with the U.S. Copyright Office, had not been registered until one year after the date that the photographer first licensed use of all the photos and then posted these photos on his website. Our client obtained and used the photos six months after publication and six months before registration.  That was a fortunate break for our client. The photographer had failed to meet the requirements imposed under Sections 504, 505 and 412 of the Copyright Act. As a result, the photographer was precluded from seeking statutory damages and attorney’s fees. 

Our client had used these photos for promotional purposes. While the photographer was entitled to seek our client’s profits attributable to the infringement, it was quite speculative on the photographer’s part to establish that any portion of our client’s revenues from the rendition of accounting services was attributable to the use of these photos, versus its reputation for high quality services and its virtual market monopoly in a particular industry. 

At the end of the day, having to concede no entitlement to statutory damages and attorney’s fees, recognizing the costs associated with a forensic audit to establish profits and the battle to follow over the speculative nature of this claim, the photographer reverted to only claiming her damages. These damages were only her loss of revenues, and it was fairly easy to bracket a range of licensing fees for our client’s unauthorized use, based on the photographer’s prolific licensing history, and arrive at an agreed-to number. No doubt the result would have been far different if the timing of the registration had been different.