Category: business

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What To Do, part 2

So you’ve found a probable infringement and you’ve gathered all the evidence you can (see previous post), now what? You have choices[1]: do nothing, contact the infringer yourself and send an invoice, contact the infringer yourself and send a cease and desist/demand letter, send a DMCA takedown notice to the infringer’s ISP[2], or contact a lawyer.

Of course, I’m going to say “contact a lawyer” is your best option (um, duh!), but I’d like to discuss the other options a bit here, too.

First, I think that doing nothing is not a good option, with one exception: if you are so utterly risk-averse that you can’t bear the slightest chance that you may end up in court over the illegal use of your work, then sit on your hands and seethe, but do nothing. That is, if you do anything else like the options described below, you do run a small (and usually is a very, very small) risk that the other side will file suit against you for declaratory judgment that it did not infringe. This is really rare because copyright infringement is strict liability and so, unless you missed something like a license granted to the infringer, it’s a loser case for the infringer. I had this happen once–the infringer tried to use it to scare off my client. Didn’t work and, not too much later, we negotiated a settlement that my client was quite happy with (plus, my client saved the cost of filing the suit). Still, if you don’t want to face the generally tiny possibility of going to federal court, do nothing.  Otherwise, read on.

Some people suggest sending an invoice to infringers, but I don’t encourage that. It’s likely you will undervalue the infringement and maybe even miss additional claims that will add value to the overall matter, so you sell yourself short. Worse yet, an invoice sent will virtually neverresult in you getting a check for your invoice’s full amount. At best, the invoice will be a start to a negotiation; but, if you’ve already undervalued the matter and then you end up at, say, 50% of that, you’re bleeding money. You also set your price without knowing all the facts and that could bite you if you end up in court later. Nope, invoicing is not a wise idea in most cases[3].

Similarly, I generally don’t encourage creatives to send cease and desist (aka demand) letters of their own drafting because they usually (of course, accidentally) screw them up because of language errors as well as under-valuation. If you don’t know the law, you may  (as mentioned above) miss legitimate claims that add to the value of the matter and you could end up offering to release a $25,000 claim for $5000.

As for language, there are two main areas of concern: misusing legalese and slipping from legitimate demand into extortion. The latter, first: “Pay me $10,000 or I’m going to go public with what a thief you are!” is going to get you in trouble but a demand for $10,000 to settle the claims is not inappropriate if the facts support it.  The line isn’t so obvious sometimes and, since anti-copyright folk scream Extortion! at any demand, you want to be sure you don’t actually cross that line.

Using legal language incorrectly happens often and often it is by people who are very smart but, not being attorneys, they have no clue that using certain words means something different in a legal context (like published in copyright law, for one example). To paraphrase Inego Montoya, “I do not think those words mean what you think…” and that can get you in trouble when the other side lawyers up.

Another error in artist-drafted letters is you can be a doormat: “I’m sorry, I’m sure you didn’t mean to, but you used my work. Would you be willing to pay me $100?” is differently but arguably just as bad as accidentally extorting the infringer. You’re undervaluing the infringement and groveling…ick! Overall, unless you have a form letter drafted by an attorney and you are very confident in evaluating your cases for all the potential claims and their damages, I encourage you to refrain from drafting and sending letters yourself.

Moving on… sending a DMCA takedown notice to the ISP is a tool you can wield, and it will probably get the infringement stopped, but it does nothing about getting you the money you deserve for the illegal exploitation of your work. Usually, I think it is better to notify the actual infringer first (as a part of a demand letter) and then, if it doesn’t remove the work, send the takedown notice. This can be a strategic choice that is worth evaluating with an attorney too as, for example, continued use after notice can be a factor for willfulness. Also, you do want to be sure to send a technically proper notice, if you choose to send one at all.

That brings us to the final option: contacting an attorney. A competent copyright attorney will avoid the issues described above, will evaluate your claim(s) and your opposition’s potential defenses, and will advise you on your best course of action. We have to–there are rules (actually, laws[4]) that demand it of us. So, as opposed to companies[5] that claim to help you with your registrations or infringements, attorneys, once hired, must put your best interests first, including above our own. It’s part of why we have to be licensed–to provide competent counsel to our clients.

While we attorneys can’t take every case that is brought to us, we are required to hold your information confidential even if we don’t take the case so it is worth talking with one of us before you do anything.

_____________________

[1]As long as it is still less than three years since you discovered the infringement (in most cases/places), you have options. The statute of limitations is 3 years for infringement and usually that clock starts ticking when you discover the infringement. Don’t wait until the last minute.

[2]DMCA takedown notices do not go to infringers but rather to the ISPs that host the infringement. For example, if I were an infringer of the post office photo I showed in my last post, the author of the photo would send the notice to my host, not me. It gets the work removed and gives the host/ISP a legal protection (safe harbor) against being sued for infringement, but the author could (and arguably should) still go after me as the actual infringer.

[3]An exception may be with an existing client who has used work beyond the scope of a license; then, for a continuing-business-relationship reason, an invoice may be wise.

[4]See, e.g., Cal. Bus. & Prof. Code §6068, including sub-section (g) that says an attorney must not “encourage either the commencement or the continuance of an action or proceeding from any corrupt motive of passion or interest.”

[5]Companies are required to make as much money as they can for their shareholders, first and foremost.

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Are You Getting Played?

Last night, I had the joy of going to a lecture by Dan Winters (thanks APA-SD). Even before I heard his impassioned words about his own work and about others’ art and the importance of what artists (particularly photographers) do, I had been thinking about writing a blog post like this one. It’s not going to be easy to say some of what I have to say and some feelings are going to get hurt but, honestly, everything I’m going to say is said out of love and respect.

Yes, I love creative professionals–it’s why I do what I do. Y’all amaze me with your visions and abilities and you contribute so much to our culture, but y’all need to stop. Just stop. No, not stop making great creative work, but rather y’all have got to stop not running your businesses like real damn businesses, stop looking for “easy” when it comes to doing the non-creative parts of your businesses, and generally you must stop selling yourselves short and stop getting played for it.

Artists[1] are notorious for throwing themselves into their creative work–the stereotype of the compulsive artist working without a break to make her/his art doesn’t exist without reason. Y’all have the drive to perfectionism in your art that makes your work ethic arguably greater than the average person’s; that is, for creating your art. But, when it comes to the non-creative part of your work, far too often it’s like the artist suddenly becomes dumb and lazy. You look for shortcuts and cheap/easy solutions, rather than doing the (hard, shitty, no-fun) work of being a business. It makes me more than a little crazy to witness–mostly because it is simply artists giving into fear and insecurity[2].

The reality is that what you do is amazing and valuable and you must recognize this to move forward. I mean your art is economically valuable (on top of culturally)–very valuable in fact: to the tune of $4.2% of the US economy. That is over $760B![3] Photography alone, added over $10B to the US economy and design, $19.5B[4]. Those are huge numbers and deserving of respect, including working the shitty work.

You contribute to those huge numbers.
Your contribution is worthy of respect.
Your business is worthy of (self-)respect, including the money.

So why then do we have this illusion that to be an artist means you have to hate business and be ashamed of making money? Because it is in other businesses’ best interests to hold you down. It is better for internet companies (and other clients) to call your work “content” like it is some unimportant filler for their products and tell you how they can’t pay you (much, if at all) for it but that your exposure will be worth more than money (which is, of course, bullshit)–because it increases their margins.

Okay, we all know this about clients. I’m not saying anything new–we all know that it’s in clients’ best interests to get your work for as little money as possible. But, and here is the tough stuff to hear, some of your vendors are also screwing you and, importantly, doing so with your blessing.

Maybe it’s easier for me to see this because I’m a woman and have lived my life getting mansplained and underpaid and told that I should be happy with it or happy that some guy deigned to take me out at all or lucky that someone offered me a job or that it was my fault that someone did whatever nasty shit was done. Women are used to it (I’m guessing people of color get this idea, too) and used to fighting against it. But most pro photographers (if not all kinds of pro artists) are men (mostly white, too, I’d bet) and I suspect y’all don’t like thinking that you may be being played, so you ignore even the possibility. Vendors are relying on you behaving like this because it is in their best interests.

So, out of love and a respect for each of you and what you do, I’m telling you a hard truth: some of you are choosing to work with vendors who are selling you the idea that they are offing you a great service and, because you hate doing the non-creative part of your business, you don’t look at whether it is really in your best interest. You assume that because, for example, the guy who started up company X was a photographer himself, he must have your best interests at heart and you willingly give up far too much of your money for the privilege of letting that company (ahem) “help” you.
Honey, you are being played.

You have got to take control of your own businesses and that includes doing the hard, no-fun, non-creative work. Don’t assume that some company is out to help you or that their “solution” that seems to make your business life easier is actually to your benefit in the long run. Often, they are not.

In my opinion, the worst offenders lately are the companies that offer copyright registration and protection services. These companies are ripping you off and you are thanking them for it, like Kevin Bacon in Animal House.

These companies usually charge a subscription fee for which you may get a certain number of copyright registrations and the company will then find infringements of the images you submit. However, the companies then generally require you to use their settlement services[5] for any of the infringements found and then usually take more than 50% of each of your settlements received (more, if the cases get filed)[6] [7].

Adding insult to injury, much like the stock agencies did in the late 1990s when they figured out they could get away with it, these companies often accept very low amounts in settlements–far less than each infringement is really worth, even in settlement–since the companies make it up in volume (something any individual artist cannot do). As an example, say, you get 45% of the $1000 they get in settlement for each your 10 infringements[8] (total, $4500 to you), and they get 55% of those 10 ($5500). However, they also have 999 other customers and get 55% of $1000 for each of the 10 infringements they settle for each of their other customers… and end up making $5,500,000!

Plus, don’t forget, you don’t clear that $4500–you have to pay your subscription fees, too, plus the registration fees to the USCO and, in the end, you might make $3000. Maybe. The company, meanwhile, gets at least another $300 x 1000 in subscription fees ($300,000) plus likely more fees for more registrations than the subscription includes and, well, you can see who is making the real money here.
Hint: it ain’t you.

Finally, you are relying on non-lawyers (usually) to register your copyrights with the USCO and, if they get something wrong, you are screwed by the faulty registration. A faulty registration, if relied on in court, could result in your case being dismissed and you having to pay the other side’s attorneys’ fees and costs, under 17 USC §505.

Oh, and by the way, these companies are not legally required to have your best interests first and foremost like a lawyer must (by law!)–in fact, the companies have a legal requirement to make money[9].

As if all that wasn’t bad enough, now you have these companies claiming that blockchain will make it all easier and better. It’s bullshit, as I have explained before.

The reality is that the non-creative part of your business is a large part in creating and keeping your money–your wealth. The non-creative part of your business includes registering your copyrights, looking for infringements, and pursing infringers. It is also keeping your books, paying your employees and other crew correctly and on time (including proper withholding and workers comp), and having good insurance. It is also using good paperwork for everything, having written and well-drafted licenses, and having contracts offered to you reviewed when you don’t understand them, not to mention stuff like keeping records and files. It’s not the fun stuff, and it is not easy, but it is as important as the actual art you make. Stop looking for shortcuts.

Look at the successful artists you know and you will find that not only are they often highly creative[10], they are also equally devoted to the business side of their business. They learn about and run their business like a business and they hire people to help them, like (in-house) a studio manager and out-of-house a CPA and an attorney. They respect their creative work enough to treat the non-creative part of their businesses as equally important. They hire licensed professionals who have their best interests as first priority to do the things those pros do best. They work their asses off to make sure they are taking care of the non-creative part of their businesses and act like professional business people, without apology. No excuses, no whining; they get it done.
What is your excuse?

I was talking about all this to my boyfriend, a former CFO and financial analyst, last night. He said (paraphrasing), “The artists are totally getting screwed–they’re not recognizing that they are over-paying for a service they don’t actually need! Why don’t individual artists hire people to help find infringements or do their paperwork?”
“Money,” I said, “they don’t feel like they can afford to hire help.”
He thought for a second and said, “Why don’t they get together with others and jointly hire someone in-house to find the infringements (to hand off to their attorney) and to take care of running the other business stuff (like bookkeeping to hand off to a CPA)? Get a couple of artists together and they could totally afford to hire someone who could do this for them and it would be much more cost-effective.”
I looked at him and said, “That’s brilliant!”

Whatever you choose to do, you simply cannot keep letting others sucker you out of your money, be they clients or vendors. Stop pretending you don’t want to make and keep as much money as you can, making the work you love. Your work is too important. Your skills are too great. You owe it to yourself, to your art, and to your industry to do better. I know you can.

_____________________

[1] I’m going to call you all collectively “artists” but this all holds true for photographers, illustrators, writers, designers, etc.

[2] “Imposter syndrome” is a real thing (https://www.nytimes.com/2015/10/26/your-money/learning-to-deal-with-the-impostor-syndrome.html) and very prevalent among creative professionals. Actually, many pros in many fields (including the law) have that fear that they are not worthy or will be found out as being a big faker.

[3] https://www.arts.gov/news/2018/arts-contribute-more-760-billion-us-economy

[4] https://www.arts.gov/artistic-fields/research-analysis/arts-data-profiles/arts-data-profile-16

[5] By the way, the “agents” for these settlement services are usually not lawyers and may in fact be practicing law without a license and/or illegally sharing fees between lawyers/non-lawyers. I also have questions about whether the companies offering advice about registering copyrights are also practicing without a license. I expect that many of these companies will face Unlicensed Practice of Law suits in the near future.

[6] Most attorneys I know, including myself, have much lower contingency fees–more like 33-40% to the attorney (before filing suit); and we’re required by law to work in your best interests, not our own.

[7] Notice how these companies often word it like “You get to keep 45% of the recovery!” like it’s a present to you. Blerg. It’s your damn money–you are paying them, not the other way around.

[8] Each infringement is likely worth significantly more than that $1000, too (if the copyright is registered, likely many times more)–so you’re already starting in a hole.

[9] Each state has its own laws for corporations, but most say something to the effect that “the purpose of the corporation is to make money for its shareholders.”

[10] Yes, there are exceptions–we all know artists whose work isn’t all that but who seem to make money hand-over-fist with it.

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Blockchain is for Blockheads

Remember what I wrote recently? Seems a respected investment hedge fund agrees:

The use of blockchain in operating an image copyright platform accomplishes nothing. KODAKOne intends to utilize smart contracts and a crypto-asset to solve the problem of copyright infringement, but the business idea is flat-out silly. Cryptographically hashing an image into a blockchain doesn’t prove the provenance of intellectual property, a blockchain does not reduce the resources necessary for copyright enforcement […]

It’s definitely worth reading the whole original post on this, from the UK’s Mr. David Gerard, as he shares more on what a total scam blockchain is for photographers overall.

Look, if you want to protect your copyrights, REGISTER your work with the USCO and hire an attorney to go after infringers (it costs much less than you may think).

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Exclusive Licenses and Your Business

Have you ever granted exclusive rights to your work? If so, I sure hope you got paid enough for it because you may not be able to sue for infringement of that work. Maybe. It depends. Language matters and this is (likely, surprisingly) technical stuff.

A new case doesn’t help; actually, it kind of muddies the water and I’m sure it will be debated by lawyers in filings and cases to come. In Fathers & Daughters Nevada, LLC v. Lingfu Zhang, Case No. 3:16-cv-1443-SI (D. Or January 17, 2018) (“Zhang“) the court split a fine hair about standing and exclusive licensing and it has some copyright owners and licensors[1] worried.

Get popcorn, this is going to take some explaining.

Courts require something called standing in order to sue (for any suit). Standing roughly means that the plaintiff is the person who was harmed/affected by the defendant’s illegal actions. If you get punched by a jerk in a bar, you have standing to sue the jerk for assault and battery because you were put in fear and physically harmed. Your friend who, from across the room, saw the jerk hit you? She does not have standing to sue the jerk for assault and battery for that punch, because she wasn’t actually harmed by it[2]. Got it? Good.

Now, a bit about copyright… it is often described as a bundle of sticks where each stick represents an exclusive right. That bundle actually consists of six big sticks: one for each of the rights listed in the statute[3]: to reproduce the work, to prepare derivative works based upon the work, to distribute copies of the work, to perform the work publicly, to display the work publicly, and to record and perform the work by means of an audio transmission. Each of those big sticks is made up of its own sub-sticks, and they can be very specific sub-sticks. For example, the right to reproduce can be made up of the sub-sticks “the right to reproduce the work in print,” or “the right to reproduce the work in the USA,” or “the right to reproduce the work for 6 months,” or those sub-sticks can be combined into the stick “the right to reproduce the work in print in the USA for 6 months.”

It’s an imperfect metaphor, but it’s about as good as we can get and it’ll be helpful here.

Anyway, an original owner of a copyright owns all these sticks[4] and can share any of them by non-exclusive licensing. After granting a non-exclusive license, the copyright owner still holds the stick. The licensee doesn’t get the stick but the license means s/he/it can’t be hit with that stick now, so to speak[5].

However, (and here’s the thing I bet you didn’t know) when an owner grants an exclusive license for any of these rights, these (sub-)sticks, s/he is handing that stick over to the licensee–and (often) letting go of it. The statutes and case law say that an exclusive license is tantamount to ownership of the right conveyed in the license[6]. For example, if you grant the exclusive reproduction right in print in the USA for 6 months, you no longer own any right to reproduce the work in print in the USA for that 6 months.

Now to bring the pieces together… to bring a suit for copyright infringement, to have standing to sue, a plaintiff has to be the person who owned the rights actually infringed at the time of the infringement. In other words, the plaintiff had to have that particular stick when the infringement happened. Let’s look at some examples to make that clearer.

Example 1
Betty makes an illustration and grants a non-exclusive license to Forbes for display use on its website for 6 months only. Sometime during those 6 months, BloggerBob copies the article and the illustration and displays them on his own website. Forbes cannot sue for infringement of the illustration[7] because it only has a non-exclusive license and Betty still owns the exclusive right. Betty still has the stick for website display during that time and so she has standing and can sue BloggerBob for the infringement.

Example 2
Betty makes an illustration and grants an exclusive license to Forbes for display use on its website for 6 months only. Sometime during those 6 months, BloggerBob copies the article and the illustration and displays them on his own website. Forbes can sue for infringement of the illustration because it has an exclusive license for website display for those 6 months! Here, Betty does not own the exclusive right any more–she has handed that stick to Forbes for the 6 months–and so Betty cannot sue BloggerBob for that infringement.

Example 2a
Now, just because Betty has handed a stick to Forbes doesn’t mean she didn’t keep all the other sticks. During this same 6 month Forbes license window, Tony Tshirt illicitly prints Betty’s illustration on clothing and sells the items. Betty (not Forbes) has standing to sue Tony for that infringement because he infringed on a different exclusive right that she still owns.

 

Okay, now here is where it gets uncomfortable and confusing. In a previous case[8] in the 9th Circuit (Minden, as well as other cases and in other places), the court said that a copyright owner can grant an exclusive license to a licensee and (wait for it) still keep that same stick–essentially saying both the licensor and the licensee have the stick, while excluding all others from having it. The terms of the exclusive licenses in Minden and these other cases included the owner retaining some the right explicitly or the licensor had something called “beneficial ownership” of the right (for example, was paid royalties based on the exploitation of the right granted[9]).

However, in the Zhang case I mentioned at the start of this post, the court said the copyright owner, when it granted an exclusive license for the right later infringed, gave that stick to someone else entirely and so didn’t have standing to sue. That is, they didn’t keep any of the stick for themselves (nor get any beneficial ownership), and since it was that stick’s rights that were infringed, the copyright owner could not sue. Ouch.

Yeah, I know, it sounds a lot like the same as Minden, but with a different outcome, but it isn’t, quite. The difference is very much in the wording of the licenses– technical stuff. Honestly, these issues are sometimes difficult even for attorneys to understand, and we are highly trained to understand them! Don’t feel bad if you don’t totally grok this stuff.

So why am I bothering to tell you about this? What does this mean for you as someone who licenses your work to others? Basically, you need to be very careful of your license language and, if you are going to grant an exclusive license especially, make sure you do it in a way that works for you AND that you get paid enough for it.

Too many artists just throw around words like “exclusive” without understanding that they could seriously impact rights and the artist’s livelihood. Don’t be one of them. Also, don’t sign contracts unless you fully understand all the terms and their effects.

Best practices would be to hire an attorney to draft your licenses and to read contracts offered to you by your clients. Yes, this will cost you some money but (a) you can write it off and (b) it may save you much more in the long run. Ignorance is no excuse, especially in court. Worse yet, when you throw around legal-sounding words without understanding their effects, you are still bound by their effects.

Remember: you are an artist who is running an arts-based business–you need to run it like the real business it is.

__________________

[1] A licensor is someone who grants licenses to another party (that party is the licensee).

[2] I know someone reading this is going to say she could sue for something else, and maybe she could, but I’m not going there. Just roll with the example being limited to civil assault and battery.

[3] 17 USC §106

[4] A later owner, someone to whom the copyright was assigned (transferred) may very well own all of these rights, but it’s possible s/he/it may not. To use the favorite phrase of attorneys everywhere: it depends. It can get very complicated and I don’t want to go into all that here.

[5] I mean, a licensor can’t sue the licensee for a use covered by the license granted to the licensee.

[6] 17 U.S.C. § 501(b); Minden Pictures, Inc. v. John Wiley & Sons, Inc., 795 F. 3d 997 (9th Cir. 2015); Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881, 890 (9th Cir. 2005); etc.

[7] Forbes’ rights in the article may be an entirely different story–I’m only discussing the illustration here.

[8] Minden, 795 F. 3d.

[9] Broad. Music, Inc. v. Hirsch, 104 F.3d 1163, 1166 (9th Cir. 1997).

 

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Blockchain Copyright Services: Seductive, but Unwise

Kodak is joining the list of companies offering blockchain-related services for photographers. While I applaud the idea of photographers getting paid, I’m not a fan of these services. Mostly, the financials are not, in the long run, good for photographers.
Not by a long shot.

I know exactly what many people are going to say: without much effort, photographers will get paid for uses they didn’t get paid for before. Thing is, that may not be true at all; and, even when it is true, the amounts will be less than they could get if they pursued these infringements, and they are infringements. Most of all, photographers will be giving up way too much for the convenience these services are selling.

Let’s back up a bit and look at the process and the financials…

First, a photographer makes a photograph and registers the copyright in it using one of these services (any of ‘em–let’s call our hypothetical company “Block,” just for ease). Block submits the registration to the USCO and, hopefully, doesn’t make any significant error on the registration application (this is the first problem, in my book, because registrations are not just “fill in the blank” easy and if it gets screwed up… ouch). Anyway, Block also assigns the work its unique ID via blockchain. It also incorporates all sorts of things that sound fabulously whizbangy and techno-impressive, like connected thumbnails of the deposit copy and the registration.

The big selling point is that the services will patrol the interwebs looking for your image and, if the image is used, will pursue payment if previously unlicensed. These uses are billed for, through Block, who then collects on these “post-use licenses” in part because the blockchain ID will “authenticate” the image.
In theory.

The reality is not so fabulous.

First, what the hell does “authenticate” even mean here and what good does it do? I mean, seriously, is an infringer going to bend over and pay just because you have blockchain proof it is your registered-copyright photo and, thus, that they infringed? Nope. No more than infringers do now when confronted with existing forms of evidence (evidence, by the way, that has been used by courts long before blockchain came into being[1]). Infringers, and these are infringements we’re talking about, will refuse to pay just as they do now.

Maybe there’s one exception: infringers might pay more often, but only if the amounts demanded are tiny. This is the business theory, at least, for these companies: they will collect something for more of the infringements and that those amounts will add up. While this is great for those companies, who will make lots in volume, this is short-term thinking at best for individual creative pros (who will not make it up in volume and who lose more…keep reading).

Let’s say that Block bills a whopping $50 per blog use infringement (again, they are calling it a “post-use license” to sell it to the infringers, because it sounds nicer than calling them infringers). If you are a pro, I think you should NEVER sell a license for $50. Ever. Even for a personal blog use. It lowers the value of your work. I don’t care if it’s used on some tiny not-for-profit or personal blog, if you are a pro, a license to display your art is worth more than $50. But still, let’s stick with that amount (which, I suspect, may even be high for these services) because, at that number, Block (etc.) will get a bunch of these “sales.”

The individual artist, however, will have to collect on 15 of these $50 “licenses” to earn the minimum statutory damages owed, under the law, for a single infringement ($750)[2]. Worse yet: I’ve heard that some of these “services” charge 45-55% of the fees collected (a ridiculously high percentage, by the way), so now you’re looking at double that 15, just to get the minimum the law says you must get for a single infringement of a photograph whose copyright was registered before the infringement. And remember, the first thing you did here was register the copyright with the US Copyright Office so, um, yeah.

In other words, you’ve done the (allegedly) hard part–registering the copyright–so why in the hell are you giving away all the financial benefits of doing that?!?

But it gets even worse on the financial side. Let’s say you, through Block, have granted a bunch of these $50 licenses for online use. In fact, let’s say Block even billed and collected $500 for a “post-use license” for use on a small business commercial blog (extremely unlikely, but still). Now, that same photograph gets used by MegaCorp on its website and, in the negotiations, MegaCorp says it will pay $2500 to settle–five times the largest amount you ever got for a license for that photograph. You know that the license is worth more like $10,000 so you refuse (assuming you can–the agreement with the service may have you waive the right of refusal) and the case goes to court. Not only is it very possible that the court will not award you more than $2500, because, in part, of your low price history, it is unlikely that you will collect attorneys’ fees since you refused what appears to be, in that context, a reasonable offer, pre-suit[3]. You have, in essence, set your value at almost nothing because Block licensed your work (post-use!) for almost nothing, over and over. Even if you have licenses that you have issued that are more valuable, you will have to fight it out in court because your own evidence shows you will accept less. Ugh.

Now, as if the financials could be balanced by the services provided, let’s look at the blockchain proof these services are touting: short answer is you don’t need it. Really, it is of no added benefit to you, although it might make Block’s work easier. Sure, if you are asking for essentially a micro-payment and can wave the evidence of registration, etc., at the infringer, you might get paid quickly. However, in fact, in some ways by doing this, Block (and thus you) is doing the work of the defendant and that removes a tactical tool for later (litigation) use.

For example, assuming you registered the copyright shortly after creation of the work, you don’t need to prove that the work is validly registered. Under the law, if you registered the copyright to the photograph before or within 5 years of its first publication, then the legal burden is on the defendant to prove that the work is NOT properly registered, not on you to prove that it is[4]. It’s expensive to get deposit copies and the defendant should bear those costs since it bears the burden of breaking the registration. So, actually, you aren’t making it easier for them to pay you, you are taking away some of the tools your attorney can use to pursue them.

Oh, and about “your attorney,” if you use one of these services you likely agree to use their attorneys for any litigation resulting from a use they found. Their attorneys are contract attorneys who are getting paid very, very little to handle your case. I know because I have been approached by and refused to work with some of these companies as the rates offered were unreasonable.

Finally, and not for nothing, at least Kodak is using its own cryptocurrency for payment. This fad is not a good thing, as Warren Buffet has noted, and I agree. There is way too much uncertainty in the values, including the very likely possibility of total loss. Get paid in real currency, if for no other reason then you know that it isn’t financing North Korea or human trafficking or other crimes[5].

Look, I totally understand that creative pros want the business side of their lives to be easier. Technology can help with that. It’s easier than ever to register your copyrights yourself and to track your works for infringements, again by yourself. If you don’t want to do the work of pursuing the cases, you can hire someone in-house to handle a lot of it, like a studio manager or even a (paid) intern. You’ll still end up way ahead of what you would get with these services. There are also lawyers like me who will help you, even for many of the small cases, and (usually) for a lower percentage than these services charge.

In my opinion, if you are a creative professional, you owe it to yourself to treat your business like a business, and that means making decisions not on the basis of “how easy is it?” but rather “what will benefit my business the most?” When it comes to infringements, that means not giving away the farm for seductively easy now.
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[1] Like, for example, you can (and should) make copies of the deposit copies yourself and keep them in your own files with the registration. The metadata in these files will authenticate them.

[2] For a timely registered work, statutory damages must be between $750 and $30,000 for non-willful infringement, and up to $150,000 for willful. 17 USC §504.

[3] Courts have wide discretion in the award of attorneys’ fees under 17 USC §505 and, these days, are less likely to award them if a plaintiff has refused an objectively reasonable settlement offer.

[4] 17 USC §410(c): In any judicial proceedings the certificate of a registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate.

[5] See, e.g., http://www.businessinsider.com/why-bitcoin-and-other-cryptocurrencies-will-inevitably-become-tools-of-the-rich-powerful-and-criminal-2013-12; http://www.springfieldnewssun.com/business/crime-and-cryptocurrency-how-local-criminals-use-bitcoin-illegally/ispfn3mqvwWcsPRI1AKC0L/; and, https://www.inc.com/will-yakowicz/startups-law-enforcement-agencies-catch-criminals-who-use-cryptocurrency.html

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Words Matter

I’ve worked full-time in creative industries since I left my PhD program[1] in the late 1990s, long before I went to law school. I’ve taught the business-side of being a creative pro, at the university level. Law school added to my quiver of skills and knowledge, but let’s just say that I have an understanding of the professional creative world and the business world. If there is one thing I’d love to impart to all creative pros, it is this: words matter.

Sounds kind of flippant, but it’s not. When you let those whose interests are opposed to yours dictate the language used to discuss those interests, you start from a very weak position. In fact, you may have already lost.

In that context, there are two words that immediately spring to mind that creative professionals must stop using: content and plagiarism.

Let’s start with the latter first: plagiarism is not a synonym for copyright infringement and we must stop using it as such. Plagiarism is a failure to attribute the original creator of something, usually words, cited in something else[2]. For example, if someone writes an article that includes:

Law school added to my quiver of skills and knowledge, but let’s just say that I have an understanding of the professional creative world

without noting that it was a quote of something I wrote, that would be plagiarism but it may or may not be infringement. Plagiarism is a passing off as one’s own work the work of another, and almost exclusively in the academic world, although it can appear in written work like journalism, too. In many ways, plagiarism has a closer connection to publicity rights (and definitely to moral rights, which we do not really have in the USA), since it is about attribution to the original author.

Importantly, if you take and use someone’s work and include an attribution to that person, it is not plagiarism…
…but it may very well be copyright infringement.

When we use plagiarize for infringe, we muddy the waters. A lot. This misuse leads to people thinking that they can use any work for free, just as long as they include a credit line or other form of attribution. It also contributes to the misguided notion that, if a work appears without a copyright notice or attribution, then it’s free to use.

I spend a lot of my time teaching infringers that hard (and, often, expensive) lesson; but what worries me is that the more people see attribution as a free-pass to use, use that is really infringing, the more likely Congress will enact laws reflecting that notion or courts will give it more weight than they ought in fair use analyses.

To protect against that, we must be diligent to use the proper words. For most non-academics, your concern will be about infringement, not plagiarism–call it by its correct term.

Turning to the other word, content, this one could practically drive me to drink.
Heavily.
Early in the morning.
Alone.

Using the word content is a great way to turn any creative work into nothing more than filler–something of no value itself. It also subconsciously makes the holder of the content into someone more important than the creator and even more important than the work itself.

Content reduces the value of your work to practically nothing[3]. Content gets shared (that is, freely displayed and distributed) on platforms[4] that don’t even value it enough to monetize it. Instead, these platforms monetize the data provided by the people who use the platforms. And those platform companies are all valued in the billions of dollars, because of that data they gather and sell.

The heartbreaking reality is that artists have been sold the idea that their content isnt really worth anything but that exposure of their content on these platforms will lead to riches. If your content trends, then some big company will call and offer you a huge contract to make art for it–lucky you! While that is vaguely possible, it is about as likely as winning the Powerball lottery. In other words, it’s business insanity to rely on that minuscule chance.

Sadly, each time you post a work on one of these commercial platforms, for free, for others to “like” or share, the only involved person/entity not making money from the exploitation of your work is…
wait for it…
you.

However, the reality is that what you create is of enormous value and should not be reduced to the notion of being filler (content). It is what draws users to the platforms! If you are offering your creative work on these platforms, free to share on those platforms (if not more broadly), you are giving away too much. Again, the art/photos/words/music you create is what draws users to the platforms and those users are what makes those platforms money! No content means no users means no money for the tech overlords or the advertising businesses that suck off their data teats.

Adding insult to injury is that by freely offering your work on these platforms, you are helping to train the average user of those platforms that your work is of no value. Your photograph, painstakingly created with a crew and lights and years of experience, is of the same value as any users pic of their cat, because you both got paid the same amount to post it on that platform. Same for your writing, same for your music, same for your illustrations. Courts think that way more than you know. AND, if your work is free on platform X, then why should anyone have to pay to post it on platform Q or, for that matter, on their blog or small business website? After all, it is only content and content is free stuff the purpose of which is to get freely shared. Try proving up the value of your work when you’ve been giving it away this way–it’s the stuff to give lawyers nightmares.

To be absolutely clear, no one will ever value your work more than you demand or more than you value it. When have you ever given an estimate to a client for a project and had that client say it will pay you double that amount? Call your work what it is, by its proper name: art, photograph, essay, book, song, composition, illustration, painting, whatever. Don’t let the tech overlords tell you what your work is or what it is worth by controlling the language.

Honor yourself and honor your creative work by using its proper name and insisting others do as well. Also, register your copyrights in your art, don’t give it away, and finally, go after infringers. It is your work, your creation, and you deserve more than just attribution.

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[1]Large parts of my graduate studies were in linguistics, by the way.

[2] See the Merriam-Webster Dictionary definition here: https://www.merriam-webster.com/dictionary/plagiarizing

[3] Worse yet, an artist or author of any stripe calling her/himself a content creator is tantamount to that person saying I make stuff of no real intrinsic or extrinsic value. Do not be that person.

[4] Platform itself means something higher than its surroundings, so the tech companies have taught us to value their works much more than the creative work on them.

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We Are All Afraid

First, an apology for not posting anything for a bit. In my defense, I have been extraordinarily busy: on top of my practice, Im prepping for a move next week (packing is such a time-sucking chore) and have been hosting my niece for a couple of weeks while she does an externship in emergency veterinary medicine.

Im very proud of my niece. I have no right to be as Ive had nothing to do with her upbringing beyond sending presents and good thoughts across the country (shes from Atlanta and goes to the University of Georgia School of Veterinary Medicine in Athens, GA), but Ill claim the privilege of relation. Contrary to the stereotype millennial, she has worked hard to get where she is. In case you werent aware, getting into vet school is harder than human medical school–there are many fewer schools and the competition is fierce. She will be awarded her doctorate next spring.

My niece reminds me of the value of work and a good attitude. She could have been daunted by the odds, by the amount of work, by the cost of school, by a whole host of things that could go wrong, but she did it anyway. I’m sure she was afraid, more than a bit, of failing at many points along the way. But she did it and shows every sign of becoming a very good and successful vet–maybe even specializing in surgery. Wow!

She, and my upcoming move, remind me of how facing our fears and doing (whatever) anyway is the best route to success. Speaking of which, I wrote the following in 2006 and it holds true today…

_______________

Ive written about fear in one of my Manuals[1], but there is something about fear and business that I may not have been clear about: we all have it. Every single businessperson has fearsuccessful people do, just as less successful ones do. The difference is in how one deals with the fear.

If you are afraid and own up to it, face it, and challenge the fear, you are more likely to be successful. Some call that courage, and if that word works for you, then use it. What it is, whatever you call it, is taking risks and being open to living with the results.

We do that every day. Every day we take a risk driving (accidents), playing a sport (hurting yourself) or even just eating (food poisoning). Theres a risk in taking a shower (you could slip) or taking some medication (side effects) and there are big risks in falling in love (a broken heart). And yet we do these things regularly. Why? Because the payoffs are worth it and we know that we can live with the results, even if they are painful.

Can you imagine never being in love? Sure, youd never run the risk of getting hurt. You could protect your heart and rationalize it by saying that over 50% of relationships break up, etc. Thatsoundsreasonable. But, youd never know the joy of an intimate relationship, or passion, or the sublimely absolute trust that someone is totally there for you even in your lowest moment.

So it is in business. You can play it safe, not take risks, and be like most everyone else who is trying to do the same thing, or you can try something new and risky, but whichmightpay off in a big way.

Did you become a creative to do what others have already done, or did you do it because you see things differently and/or you want to express something more in your work?

Take the riskbe your whole self and show your true vision. Be passionate. Put yourself out there. Yes, you may fall on your face, but youll be truly alive in the process and, more importantly, you can only be great if you try.

——–

[1] For those of you who dont know, when I was a rep and consultant (as Burns Auto Parts), I use to post and send to clients articles I called Manuals.

_________________

P.S. These days we have a lot of external fears–things over which we feel we have almost no control. For many of us our country (USA) is headed in not only the wrong direction, but a truly dangerous one. We can’t let those fears stop us either. Facing these fears may mean standing up to the racist/homophobe/misogynist screaming at you without turning to violence, or running for office, or protesting, or protecting DACA kids and immigrant families of all kinds. I encourage everyone to do the right things, to stand up for the truly American way and not this hateful MAGA hypocrisy, and to know that we can and shall overcome.

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Fear and Professionalism, v.2.0

As I said in my last post, I want to share some of my previous writings on the subject of fear and professionalism. Today, a post that is very near and dear to me, being that it was made on a very important day in my life: the day I officially became a lawyer.

What I didn’t write at the time was that, when this happened, I was in the middle of a humiliating break-up and mentally at a spectacularly low point. I was looking for a place to live back in San Diego (I had moved to LA right after taking the Bar), was middle-aged, post-law-school (and post-relationship) flat broke, and quite literally I had no one physically near to celebrate with me on this day. I had considered skipping this big ceremony, fearing I would stand out for being old(er), utterly solo, and potentially looking like a loser if I ran into people from school who knew about the relationship and move but not the break-up and return. I felt like I had a big neon “PATHETIC” sign above my head and was afraid I’d burst into tears if anyone spoke to me. Of course, this was all only in my head, but it felt pretty real (and raw) at the time.

Obviously, I screwed up my courage, drove down, and attended the ceremonies. I chose to put a smile on my face and stay mindful of the event itself and all its parts. I’m so glad I did. If I hadn’t faced the fear, I would have missed out so much I hope always to remember. Here is just a bit of what I learned that day.

_____________

Fear and the Law and the Arts[1]

Today, I took my oaths and became a real, licensed attorney. The ceremonies and speeches were rather moving and, often during the speeches, I thought about you: the photographers and other creatives with whom I have worked for so long. Surprisingly, much of what was said applied to you as well as us, the new attorneys.

There was one speech in particular that really struck me. One of the officers of the State Bar of California talked to us about fear in the profession. He explained that he had suffered from severe anxiety after being in combat, which resulted in him being afraid of speaking in public. He was afraid even to be in a room with more than one or two others. He was terrified of trying to communicate with anyone. And, during all this, he was applying for law school, wanting to pursue a profession that required him to do everything that, frankly, scared the hell out of him.

He explained that, over time, he read everything he could about fear to try and figure out what was going on (this was before we understood about PTSD). After a while, he began to realize that whatever he feared was inevitably in his path to success: from simple things like asking a girl out to his desired profession. No matter what he wanted, he’d have some fear block his path. But other things didn’t scare him and, interestingly, those things were not on his path to success. He realized that if he let the fear win, he’d never get what he wanted, so he did what he needed to, scared out of his wits as he did it.

Then, he turned and gestured to the long row of judges (federal and state appellate, about 12 or so of them) seated behind him on the dais. He said (as close as I can remember) They are afraid. Every day, they are afraid. Every day I am afraid. Every day, every one of us is afraid. He then said, essentially, that we need to lean into our fear to get where we want to go. He said that, for him, he knows now that if something scares him, that is his sign that he needs to do whatever that scary thing is. If he avoids it, he will be avoiding something that will bring him more success.

I loved that speech. It was wonderful, honest, and I knew from my own experiences that he was right. I know he was right for me and for you. Lean into your fears if you want to be successful.

There was one other thing that struck me in the speeches that I thought I should share with you. As we were about to take the oath to be admitted to the Federal District Court for the Southern District of California, an 80+ year old Federal Judge said, with deep sincerity, that whatever we do in our lives and careers, we must not stop being idealists. When he said that, I was brought to the verge of tears because, throughout my life, I have been called an idealist. This was never said as a positive, it was always said like it was something bad. Well, I am an idealist and I’m not going to apologize for it ever again[2].

I think all artists are also idealists. You have to be to do what you do. If you weren’t, if you didn’t hold the belief that art, your art, is of enough value to make a living making it, youd be an accountant or firefighter or whatever. Hold onto that idealism and don’t you apologize for it either.

_____________________

[1] Originally written and posted on June 1, 2011.

[2] For the record, I’ve stuck to that pledge. Since writing this piece I’ve received vile threats and other online bullying, but I’m proud to stand for strong copyright and my clients’ rights.

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On Amateurism v Professionalism, and Fear

This morning, I read this Farnam Street Blog post about the difference between amateurs and professionals. What I was going to write today went out the window.

I know lots of people, especially (but not exclusively) creative people, who call themselves professionals but who act and think like amateurs. It’s something I wrote about often when I was a rep and consultant; now that I’m an attorney, I see it all the more. The gist: fear versus reality.

As Mr. Parrish points out in the piece, people working from a fear-based mindset rather than a reality-based one make poorer choices and behave in limiting ways. I know this from personal experience. I was reared to respond to fear (risk-averse is an understatement!) rather than accept reality and use that reality to reach and work for more. In fact, the first half of my life (so far) was lived that way.

Then, I made a conscious change. It started small but, as Dr. Seuss might say, it grew and it grew. Now, when I look back on my life, I see that I have accomplished a lot and been more successful in many ways than I ever thought I would be. Why? Because I took risks and I pushed myself to do new things. I didn’t let the fear win.

With that in mind, over the next couple of weeks Im going to re-publish some of my previous writings on fighting fear and being a successful creative. I hope you’ll find them helpful. I’ll warn you, sometimes the language will not be entirely safe for work and some of you may not hire me because of it.

But, I’m not going to be afraid of that.

Here is the first, from June 19th, 2013:

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What Are You Waiting For?

Yesterday, I saw that a promising reporter was killed in an auto accident in Los Angeles. He was 33. This morning, there was news a best-selling novelist had died of an aggressive cancer. He was 47. And now, as I sat down to begin writing this piece, the news confirmed that James Gandolfini (star of The Sopranos) had died. He was 51.

I share this data with you not to depress but to remind you that life is unpredictable and often way too short. So, what are you waiting for?

Are you afraid of failing? Why? What is the worst that will happen? You’ll lose your home and end up living under a bridge someplace, and you have kids?

Lame excuse.
You read me right, that is just lame.
Guess what, you can do everything right and that dark future can still happen.

Or you can do everything right and get hit by a bus. Or have a heart attack or get cancer or, well, just about anything.

You have one chance at this life (well, one conscious one, if the Hindus and Buddhists, et al., are right) and you have no control over when it will end. So, I ask again, What are you waiting for?

You chose to be an artist and with that came the requirement that you have faith. Not faith in a god (not that you cant have that) but faith in yourself, in your art, and that somehow you’ll make it all work. That’s fabulous. It’s amazing. It’s actually empowering, if you stop shaking in your boots and look at it.

Being an artist requires you actually acting on that faith. You can’t say I choose to be a photographer/designer/writer and then play it safe. You have to do. You have to leap. You have to try and fail (or succeed) and try again and fail (or succeed) and keep doing that over and over again.

For the rest of your life.
That is the bargain you agreed to when you chose to be a professional artist. You have to make, and do, and (sometimes) make do.

The one thing you cannot do is wait for things to be perfect before taking the next step. I’m sick of hearing artists say I can’t send the promo because the site isn’t perfect or I’m not sure my list/promo/portfolio/edit/studio/haircut is perfect so I can’t____. I can’t. I can’t. I can’t.

If you make some excuse for not doing, then get a real fucking job because you dont deserve to be an artist. You dont have the guts.

I say that with love (you know that, I hope, by now).
But it is true.

Frankly, it’s true for any profession. It’s as true for me as it is for you. We have to get out there and do. We can’t be bound up by the fears of getting stuff wrong (which, by the way, is much worse in my profession than yours) or failing. We have to do and leap and try. Every bloody day.

Not only will doing this give you your best shot at being successful (and it will), it will make you happier in the process. Following your dream, doing what you love, isn’t that worth the risk of trying? Why be an artist if you never get to make your own art?

Life is (sadly) short for too many people. We don’t know when our last breath will come. No matter how well we treat our bodies, it is ultimately out of out control when Death will come. And each of you deserves to have loved the life you have. The only way for that to happen is to try, to do, to make your art, to follow your dream, to risk, to fail, and to do it all again the next day.

So, what are you waiting for?

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Forming an Entity: The Other Stuff

I wrote recently on some of the copyright considerations related to running your business as an entity. Today, I want to address some of the other things you have to do whenyou decide to form an entity. First, a quick reminder that I am speaking generally here and with California law in mind: each state has its own laws so your mileage may vary, so to speak.

Most creative pros start their businesses as sole proprietorships. As Ive explained before, there are no formalities required to do that, outside of maybe having to register a fictitious business name (DBA) with your county or city. Forming an entity requires filing various papers with the state, but after that is done, are you done? Not by a long shot.

Assuming youve been running your business like a business, you may have things like business banking accounts, credit cards, or insurance policies. When you have a new entity, you are going to have to convert all of these to the new entity. In some (probably most) cases, youre going to have to close existing accounts and open new ones. Youll also have to get new checks printed.

Its particularly important to talk to your insurance provider to get your policies worked out. You dont want to get caught with those proverbial pants down. This may also mean your auto policy, dont forget.

Speaking of your car, did your CPA tell you it would be best to have your company own your car? Then, youll have to transfer it (and yes, we all love the DMV, but do it). What about your other assets? Computers? Cameras? Furniture, etc.? Even if you own these things outright, it would be best to document the transfer of the assets to your new entity. Talk to your CPA before doing any of this to make sure you dont do anything to mess up her/his careful tax planning for you.

You also need to think about your IP licenses. No, not your licenses out (those you sell to other people to permit them to use your work–although you will need to update those moving forward) but the one ones you purchased for things like the software that you use in your business. Some of those will be non-transferable and you will have to purchase new licenses. Dont get angry about it and dont skip this–especially if you issue non-transferable licenses, you should understand this.

You may also have issues with any office/studio space you lease (landlords often will be fine with updating a lease) and definitely youll need to set up new payroll accounts if you have employees, including getting a new EIN number for the entity not to mention new workers comp., etc. Also, if you have a business license with the city (or county) you’ll have to get a new one for the new entity, too.

Finally, you need to learn how to sign documents properly for your entity. You may no longer sign justBetty Smith, but rather must sign as Betty Smith, Managing Member, Smith Creative, LLC, a California LLC, if you formed an LLC; or, if you did the corporation thing, Betty Smith, President, Smith Creative, Inc., a California Corporation. Yes, it’s a pain in the butt but if you don’t sign properly you can personally be liable for things. No, I’m not kidding.

Relatedly, you will need to update all your business paperwork to reflect the new entity–like your licenses you offer clientsand your contracts/estimates/invoices/model releases/etc. Also be careful in the contracts you are offered: make sure they are naming the entity and not you as the party and that there are no “Personal Guarantees” or other clauses that effectively remove the protections of the entity.

Your CPA should provide you with a lot of guidance on the financially related changes you needs to make. An attorney can help you with the rest.

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