Legal Question in Intellectual Property in California
A consultant downloaded low resolution thumbnail sketches off of a stock image site and put them on my web site. In August and October 2008, I received 2 notices to pay $2,000 for the 2 images. I called the number on the notice immediately each time and did not receive a response. In November 2008, when I couldn't get through, I requested the consultant replace the images.
In August 2009, I received a letter from their collections recovery and called immediately. Their rep offered a $1,500 settlement for normal usage fees and penalties. It turns out one image was rights managed and the other rights ready not royalty free as I expected. The cost of use for each is $196 per year, allocated in quarterly installments.
My company is a California corporation. Since, having a failed back surgery, I've closed company operations. And, just recently started consulting part-time (less than 10 hours per week) to one organization. My funds are limited and I would not have knowingly used a royalty free image.
How should I respond to this organization? Can they bully me into paying the penalties? Or, do I have any recourse?
2 Answers from Attorneys
Your consultant has cost you a lot of money. You should look to him to cover your expenses here.
Bottom line, though, you are responsible for ensuring that all material used in your marketing and advertising (i.e., your website) are properly licensed.
So, there's little you can do to avoid paying the rights holders something.... but you may be able to negotiate lower figures.
Were the notices you received invoices for the downloads or were they "cease and desist" from using copyrighted material. If they were invoices, then it means your consultant authorized them. If it was "cease and desist" then it means they consider you a copyright infringer.
If you were not aware of the downloads or the source of the images, then in copyright terms, you might be considered an "innocent infringer" which carries lower statutory damages than someone who steals on purpose.
I agree that you should start by going back to your consultant and have him take care of this. In legal terms, he should indemnify you, which means cover any costs associated with his actions, but you may have to sue him to achieve this. Best to consult with a lawyer and show him/her all the documents in order to get useful advice.
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