Category: business

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Breach or Infringement?

I’ve heard that some photo organizations may be suggesting that the way to avoid the costs of litigating an infringement claim is to have a liquidated damages clause in your site’s terms of service (TOS), because then (they say) it’s a breach of contract rather than an infringement. For example, if you put something on your site’s TOS like “If you use any of the work from this site without a license, you agree to pay to PhotoBob three times his usual fees for the license” and someone uses your work, then you can bring a breach of contract case in small claims court and avoid the cost of litigating infringement in federal court.

I have to say, I think this is very bad advice. I hope that pro groups are not recommending it. Short answer? It probably won’t work and, even if it could, it’s not a good choice. Let me explain.

First, it is very possible that your TOS are not binding on your visitors. There is case law that says that in order for TOS to be binding, a user has to either click to agree to those terms (called a clickwrap agreement) or those terms have to be so obvious as to, essentially, be on each page of your site–just having a separate page with your TOS won’t cut it. (Lawyers reading this, yes, I’m generalizing from the cases–we need to know the nitty gritty but creatives really don’t.)

Second, even if you could make the TOS stick, you would be limited to winning no more than your 3X number, and you’d have to prove that you usually got $X as a license fee in the first place. 3X is likely not going to be much money. In fact, it’s going to have to be under like $5,000 if you want to stay in small claims, depending on what the small claims court rules are where you are–that is, there are limits on how big a case you can bring in small claims. Oh, and you probably can’t use a lawyer (many small claims courts bar representation) so you’re going to have to do it all yourself.

Oh, and let’s say you win a judgment in small claims and the defendant doesn’t pay. You can’t then go marching into federal court claiming that it’s now an infringement and demand a lot more money. Even if by some miracle you did pull that off, that is that the court didn’t dismiss the case immediately, the court would likely say your damages are limited to the judgment you got already or darn close to it.

Third, how are you going to prove that the infringer got the work from your website? Have you posted it anywhere else, like Instagram? Good luck enforcing your site’s TOS, then.

Fourth, and this is the big one (yes, I buried the lede): copyright pre-emption will likely make your breach claim a loser. See, copyright is exclusively federal law and can only be adjudicated in federal court; so, if you bring a claim that is really an infringement claim, a smart defendant is going to tell the small claims court “Hey, this is really infringement we’re talking about here so you have to dismiss this case because this court doesn’t have jurisdiction.” I think a defendant is going to win with that and, boom, you’ve just waisted all your time (and filing fees).

There is one possible exception to pre-emption here, but it’s a narrow window and one I don’t like anyway. That is, if you agreed to license the work to the defendant and it later failed to pay for the license, then courts have said that is a breach of contract rather than an infringement (unless the terms of the written license stated that the license was contingent upon full and timely payment). See Effects Assocs., Inc. v. Cohen, 908 F.2d 555, 559 N.7 (9th Cir. 1990). Now, I think you should have written licenses and those licenses should specifically state that no license is granted until full and timely payment is received; but, if you have that, then the courts say it is not a breach of contract and, so, there you go… pre-emption again.

Really, I think it’s cutting off your nose to spite your face to try and convert an infringement claim into a breach of contract one. I mean, if you register your work in a timely manner (before the infringement) then you have the right to elect statutory damages and you have a decent chance at being awarded your attorneys’ fees as well. That is very, very likely going to be a much larger number than what you’d ever get in small claims court. More importantly, if you want to avoid litigation (and I always say: you want to avoid litigation), you have a better chance at negotiating a better result if you have statutory damages and maybe attorneys’ feesto back up your claim. A breach of contract claim is almost always some kind of wonky and the damages are limited–why do that to yourself?

 

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Get it in Writing

This NYTimes articleabout the legal limbo of some Avedon prints just breaks my heart. Besides the obvious part about the amazing work done by all, including the printers, being stuck in boxes, mostly unseen, the stories about why there are issues now make my downright twitchy.

Artists of all kinds are notorious for being crap at paperwork and many so-called great artists often offer(ed)their favors like Raylan Givens asking “one more time” with a smile, while puttinghis hands on his hips,revealing his badge and sidearm. That combo of sloppy business practices or, worse, intimidation by the Artiste, and fear of the employee/contractor to ask for something more concrete or as filthy as actual paymentwill likelyleadto situations like those described in the article, long after the artist is dead and gone.

It even happens when both sides actually like and respect each other but just don’t bother to putsomethingin writing. The road to hell, and all that.

Don’t let this happen to you and, almost more importantly, don’t put your minions in impossible situations.This means having open communication with the people you work with–interns, employees, vendors, whomever–so that you each can offer solutions about how to make something happen, without any one feeling taken advantage of or stuck in ambiguity about what s/he gets for her/his efforts. Intimidation is not becoming to anyone, even an artist. Having your minions fear you only makes you an ass (and generally makes them poor workers).

When you hire employees or independent contractors, pay them actual money whenever possible. Also, have signed agreements describing the relationship, the duties of each party, and anything else that comes up like “InternBetty gets to keep one set of the prints she makes for PhotoBob as a part of her compensation.” Veryimportantly, those agreements should describe what happens when and if the relationship turns bad and someone wants out.For individual projects with special circumstances, take the time to lay out the relationships involved so that everyone is, quite literally, on the same page.

And, whatever you do, put it in writing. A formal contract is best, but anything that lays out the understanding of the people involved and is signed (and preferably dated) by everyone is better than nothing.

Sure, you (like Avedon) won’t have to deal with whatever happens after you die, but I suspect you don’t want to leave your loved ones with big legal expenses to sort out your messes, either. Besides, it’s better business to treat everyone with respect. An agreement is the documentation of that mutual respect.

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A Few Don’ts

I have posted often (especially on the old BAP Super Premium blog) about things you should do, like registering your copyrights. Today, though, I think it’s time for some don’ts. Most of these are things that people seem to think are really good ideas but, when the rubber hits the road, they aren’t. Some of them can be downright dangerous. Some of these are legal-related, and some are just general business advice. So, here’s my list of 10.

Please, don’t:

  1. Before you actually hire an attorney, and I mean have a written agreement covering that particular matter (and paying a retainer, if required), cc the lawyer-you-think-may-be-your-lawyer on your email to some potential opposition. This sucks for the attorney on multiple levels, including being blindsided (never good) and pissing off the attorney’s malpractice insurance provider. Most of all, and I’m sure you don’t realize it, but you are using that lawyer’s professional reputation without her/his permission or payment! You know how you don’t like having your work ripped off? Same for us. You have, in a way, forced the attorney to represent you without that person’s permission. It’s just all kinds of bad.
  2. In any email–whether you cc’ed the attorney (who is not yet actually your attorney on that matter) or not–tell the potential bad guy “My lawyer will make you pay $X” or “My lawyer says you will owe me $150,000!” or even “If you don’t pay me $X now, you will regret it! My lawyer will rip you a new one” and the like. Ugh, even typing that gives me the willies. Don’t put words into a lawyer’s mouth; you are pretty much sure to get the law wrong and more often than not, when I’ve had potential clients do that, they didn’t even have a good case (register your copyrights, already). The threats end up hurting you. Later, when you do hire a lawyer, you will have dug a bigger hole for her/him to work out of and, it’s possible, that you could have traipsed into the realm of extortion. So very not good.
  3. Make unreasonable demands and then get pissy when they aren’t met. If you contact someone who has potentially breached a contract or infringed (or whatever), giving them an arbitrary 24 hours (ish) to fix it/pay up just makes you into the jerk. Real life sometimes takes time. Give people time to do the right thing. Sometimes they have to get their heads out of their butts first and that doesn’t always happen overnight. Same goes for money demands–don’t ask for $20,000 when a photo is used (without a license) on a personal blog–you won’t get it and now you just look like a bully.
  4. Generally, act like an ass.You get more flies with honey is a good old saying for a reason: it works. Sure, it’s not 100% effective, but I think it works much better than being a jerk. If you make it easy for someone who’s done you a wrong to make it right, without humiliating him/her or beating him/her up (verbally, I mean, please tell me you don’t hit anyone), you are much more likely to achieve your goal. When someone gets caught doing something wrong, it can be embarrassing and humans often react defensively (read: like idiots) when embarrassed. Don’t rub the person’s nose in it–rise above the nasty gut-reaction s/he may initially respond withand talk instead about how “we” can “make it right.” Look for solutions, don’t make more problems.
  5. Be greedy. Let’s say you want to get $5000 from a potential infringer (and, yes, you should always have a number in mind that you would be perfectly satisfied with from the get-go; not a pie-in-the-sky number but one that you would happily take). You’re going to ask for more than that as an opening offer–that is expected. Whenever the other side agrees to pay $5000 (or if it offers more), take the deal–you got what you wanted. You don’t have to push for even more. It isn’t about getting all you can, it’s about getting enough. Satisfaction doesn’t mean “all you can squeeze out of the bastard.” This is also true for project estimates and all negotiations in your business.
  6. Beat up Betty for what Bob did. By that I mean, it’s important to take each matter on its own merits and each potential person on hers/his. Don’t be a chump, but if Bob said he was poor and couldn’t pay a dime and it turns out he owns a mansion and a yacht, don’t expect that Betty is lying when she says she’s poor. Give each person a chance to prove her/his side of the case. Sometimes it really is a hacking or someone really is on foodstamps. I’ve found that when someone legitimately has extenuating circumstances, s/he usually is more than willing to provide some proof.
  7. Try to sound like a lawyer when someone does you wrong. You’re not one and mostly you end up sounding like you’re trying too hard and being unnecessarily nasty. You can be appropriately assertive (and be assertive, not aggressive) in your own voice and without using $20 words. See #4 above, too.
  8. Refuse to have a plan. There are a bunch of plans you should have as a businessperson. You need to have a business plan, a marketing plan, and an estate plan, just to name three. None of these need to be complex, but you do need to have an idea of where you are (A) and where you want to be (B) to be able to get from A to B. When you have a work project–be that a photoshoot or a series of illustrations for the New York Times Magazine–you plan out what you need to do to accomplish that project. Do the same for your business as a whole. As for the estate plan, well, don’t be Prince.
  9. Expect to learn the law from a creative professional (or, worse, the interwebs). Okay, I know this is going to ruffle some feathers, but creative professionals, even those who have been in lawsuits often or who have registered a gazillion copyrights*, are not lawyers and do not know the law the way a lawyer does. I swear I’m not tooting my own horn here–I can’t do what a great photographer can do even though I’ve worked with them since the 1990s. It’s just not the same as devoting yourself to the intensive study and practice for years and years. Anyway, you wouldn’t go to a graphic designer for medical advice, right? Why then do you spend good money to have one teach you about business law or copyrights? There is a reason we lawyers have to be licensed, just like doctors–when we get things wrong, it can really be life or death in some cases (there is a reason I don’t do criminal law) or at least economic life or death in others.
  10. Get angry and take things personally. This one is huge. In business (and law) the ego gets in the way too often. When people do things that negatively affect you–be that infringe on your work or try to get you to agree to work for half your normal rate, whatever–it really isn’t about you, it’s about them. Maybe the art buyer is getting yelled at and squeezed by an impossible client or the infringer is oblivious to copyright, who knows what is going on in their heads. I can tell you that almost always what is not going on is “I want to screw over this artist.” Even when the other side is acting like total jerks, it’s still about them. For example, I’ve had cases where infringers have called me horrible names; what the infringers were really trying to do was make the problem go away– each knew it was caught and was embarrassed so it lashed out in anger. Taking that anger personally would have been wasted energy. Instead, I think it’s better to approach it more dispassionately like “I understand you’re upset; there is a problem here and now we need to find a way to fix it” and then start trying to think of solutions. Your goal is to find a solution that works for you so keep your focus there.

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*I can tell you from personal experience that more than a few creative pros who think they know how to register their work have done it wrong. So wrong, in fact, that some of their registrations could be broken by defendants.

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