Whenever I take an infringement matter on contingency, I ask my client to think about what settlement amount would make them content, that is, what amount they could live with, not the amount they really would love to get. This is the bottom-line number. More is good, but every client should have an idea of their floor for settlement.
This number should be reasonable, of course, not greedy. For example, saying “I won’t take less than $20K!” for a photo used in a tweet by a regular ol’ individual is not reasonable. Nor, however, should it be a too small number (unless, for some reason, the circumstances really warrant that). Nope, the lowest reasonable settlement amount number should be something that, if you ended up with that amount, you’d say to yourself something like “I can live with this, without seething.” Besides, the other side isn’t going to get that number–it’s an internal one so we all know what we are working to achieve, at a minimum.
Once we have that number, the first offer will be significantly more–to give us room to negotiate. I won’t, however, suggest that we start at $30K or $150K, the maximum statutory damages amounts (speaking of an infringement only, here). Why? Because it’s not a sign of willingness to compromise if you start by asking for the maximum available. Yes, the law says you are entitled to something between $750 and $30K/$150K (assuming a timely registration), but the maximum damages are not often awarded and you’ll just appear greedy if you start there.
Starting off appearing greedy is not conducive to working with the other side to a settlement. If the starting number is irrationally high, it won’t increase the end number but it likely will impede settlement negotiations. Instead, starting off with a high-ish but rational number will let the other side know we’re serious and yet also willing to compromise. It opens the door to working together to a settlement.
If, despite this, the negotiations don’t work out and litigation is required, being reasonable pre-litigation will also help you in litigation. Courts do not like plaintiffs who simply demand the maximum damages, particularly when the facts don’t reasonably support that kind of award. In fact, in a recent case, the court refused to award attorneys’ fees to a winning plaintiff for that reason (pdf of the opinion, here).
While infringements are a pain and take up far too much of an artist’s time and effort, one shouldn’t look at them as a windfall. A court will suss that motivation out and it will not end well. But, if you are reasonable about your demands and your expectations, and rational in your negotiations, you can end up with enough money to make up for all the hassle.