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Being sued for copyright and not sure what to do Copyright

Discussion in 'Copyright, Trademark, Patent Law' started by Daniel Bachelor, Jul 15, 2021.

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  1. Daniel Bachelor

    Daniel Bachelor Law Topic Starter New Member

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    Jurisdiction:
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    Hello,

    My company (an LLC) is being sued by another company for copyright infringement.

    Over the years on my website, I would include a photo with stories I wrote. I found these images on Google or social media. A law firm gathered up 123 instances over the last five or so years and have filed a lawsuit against me. I've already been served.

    The images and corresponding stories listed in the 600-page lawsuit are all currently offline and have been for around one (1) year at the time of writing this. I acted immediately - removing all the images and stories - upon hearing of the infringements and conveyed so to the plaintiff, however they pressed on with a lawsuit anyway.

    From the beginning, they were not satisfied with the swift removal and wanted monetary compensation. This is when my correspondences became less frequent because I feared they would use what I say against me.

    I had no intention of hurting any photographer’s business or reputation or cause any damage or irreparable harm.

    I cannot afford an attorney to represent me. I submitted my 2017, 2018 and 2019 tax returns to them to show how much I make (barely made ends meet).

    The law firm passed that along to their client, however they came back to me and are saying the client will agree to $150,000.

    I am at the point where I do not know what to do.

    They clearly are seeking money. I just want this to be resolved and would prefer to avoid a judgement.

    Any advice would be greatly appreciated :(
     
  2. Zigner

    Zigner Well-Known Member

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    You are going to need an attorney to assist you. Of course, you could offer to accept their settlement offer, or make a (reasonable) counter-offer. You could try to offer a (reasonable) payment plan.

    Beyond that, there's really nothing an internet forum can do to help you.
     
    justblue likes this.
  3. army judge

    army judge Super Moderator

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    It won't cost anything but your time to speak with three or four bankruptcy attorneys.

    If a person or entity declares bankruptcy, and subsequently gets the debts discharged, judgments will also get zapped.

    You could even research Chapter 7 Bankruptcy, buy yourself a book or two, and initiate a pro se BK action.

    If you do it correctly, a successful outcome would also be as fortuitous.

    I wish you well, mate.
     
  4. Daniel Bachelor

    Daniel Bachelor Law Topic Starter New Member

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    Yes I remember taking a look at this a few weeks ago and recall most photos were registered after-the-fact and by more than 3 months. I remember counting around 20 that were registered prior to me posting it.

    The lawsuit says my company name LLC in it. I am only listed as the Registered Agent.

    The tax returns I provided show the money my business made. That was my only source of income. The LLC was created in 2018. The tax returns I showed them were from 2017, 2018 and 2019.

    My LLC filing is currently up-to-date.

    So because they are going after the LLC, they won't be able to seize ownership of my company or website?

    Appreciate your insight greatly. Thank you so much. 8845"]One more point to be aware of: If you're named personally in the lawsuit, you could represent yourself, but your LLC must be represented by an attorney in court.[/QUOTE]
    Dang. Most attorneys I spoke to quoted me $300-$600 per hour. I have no idea how I am going to afford that.


    The lawsuit says I am the Registered Agent, but lists my company LLC as the Defendant. I consulted with probably 5 attorneys. One of them said to tell them that I have no money, which I ended up doing, and after a few weeks of back and forth they're asking for $150,000.

    So because they are suing my LLC, they won't be able to seize my website or social media?

    I am willing to close the LLC and start a new one and/or filing for bankruptcy if that can help me. I honestly don't have anywhere near the amount proposed of $150,000. In actuality, I am in debt.

    I wish they would have given me a warning to remove the photos in question before demanding money. Their first correspondence with me ever was essentially you posted this and now you owe us.

    I do want to say thank you so much for taking the time to write everything out and respond to me. It really means everything. This is a scary situation.


    The lawsuit says my company name LLC in it. I am only listed as the Registered Agent.

    The tax returns I provided show the money my business made. That was my only source of income. The LLC was created in 2018. The tax returns I showed them were from 2017, 2018 and 2019.

    My LLC filing is currently up-to-date.

    So because they are going after the LLC, they won't be able to seize ownership of my company or website?

    Appreciate your insight greatly. Thank you so much.


    ---

    Side note: my original post disappeared. Fortunately I saved it elsewhere and am re-posting!

    Ahh thank you!

    Edit: Omg I just realized my previous posts were combined to help me with that threshold, and then I went and commented twice more. SMH. Sorry, my brain is a little fried as you can tell lol.
     
  5. army judge

    army judge Super Moderator

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    If the plaintiff receives a judgment, it would be monetary.

    I don't see how any judgment could deprive you of your property, other than your financial assets.

    Remember what you told us in your top post???

    That's what the plaintiff wants, what most of us want, MONEY!

    That is why a BK could protect you.
     
    Daniel Bachelor likes this.
  6. zddoodah

    zddoodah Well-Known Member

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    Are there 123 different plaintiffs? Or does the complaint allege that a single person/entity owns the copyrights in all 123 photos?

    Copyright law doesn't really care about intent and definitely doesn't care about reputation or irreparable harm. Copyright law is about using someone else's property without permission.

    You can't afford an attorney or the LLC can't afford an attorney? You told us that the LLC is being sued. Are you also named personally in the complaint?

    Let's start by clarifying a couple things (and I understand you might not know the answer to all of these questions).

    1. The lawsuit was filed in a United States District Court, right? You identified Nevada in your post, so is the suit filed in the U.S. District Court for the District of Nevada?

    2. Were any or all of the photographs registered for copyright at the time of the alleged acts of infringement? Have you confirmed that they are registered now? You can run searches at the Copyright Office's website. The reason I ask is because registration is a prerequisite to a copyright infringement lawsuit. While the photos need not have been registered at the time of the alleged acts of infringement, the plaintiff would be entitled to additional remedies if they were registered before the infringement (or if registration occurred within three months after first publication by the author).

    A copyright infringement lawsuit may be maintained only in a federal district court. If the suit was filed in a state court, it would be subject to dismissal (although you'd likely have to make a motion to make that happen).

    In terms of damages, the second set of questions I asked above is EXTREMELY important. If the photos were not registered prior to the infringement (or within three months after first publication), then the plaintiff is ONLY entitled to actual damages and any profits the defendant earned as a result of the infringement (emphasis on profits, not earnings). I obviously don't know anything about your situation, but most plaintiffs cannot show actual damages, and most infringers like you do not earn any profits.

    On the other hand, if the photos were registered before the infringement or before three months after first publication, the plaintiff would be entitled to something called statutory damages (which means damages without evidence). Statutory damages for non-wilful infringement are a minimum of $750 per act of infringement (and could be as high as $30k per act of infringement). Assuming there are "only" 123 acts of infringement, you'd be looking at a minimum of $92,250 in statutory damages. In addition, the plaintiff would be entitled to recover its reasonable attorneys' fees.

    One more point to be aware of: If you're named personally in the lawsuit, you could represent yourself, but your LLC must be represented by an attorney in court.

    You have a lot of things to consider here. Your life will be easier if only your LLC is named because you could, in theory, simply shut down the LLC. Either way, you really should at least consult with an attorney who handles copyright matters, and your next stop after that might be to a bankruptcy attorney.
     
    Daniel Bachelor likes this.
  7. zddoodah

    zddoodah Well-Known Member

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    Again, it's not clear if you're being sued along with the LLC. If someone gets a judgment against you personally, the judgment creditor can seek to seize all non-exempt assets. Your ownership of an LLC would be an asset subject to seizure and sale. Likewise, ownership of a domain name is an asset that can be seized and sold to satisfy a judgment. How likely are these things? Depends on how much your ownership interest in the LLC and the domain name are worth. Your original post implied that the LLC isn't making money (but, again, it's not clear if you were talking about personal or LLC tax returns), so it might not be worth much, which would mean it might not be worth the trouble for a creditor to pursue it.
     
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  8. army judge

    army judge Super Moderator

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    You don't need to wait, mate.

    I combined a few posts, which allows you a few more posts today.

    Now everything should be easier for you.
     
    Daniel Bachelor likes this.
  9. zddoodah

    zddoodah Well-Known Member

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    That's good, unless the plaintiff amends to add you personally. No way to know if that's a realistic possibility.

    "Ownership of [your] company" is a personal asset. If you're not named as a defendant, the plaintiff can't get a judgment against you and cannot take your ownership interest. The plaintiff could, however, go after all of the LLC's assets. You haven't said who the registrant of the domain is, so I can't tell you if that's in play. If it's registered to the LLC, it's at risk. If it's registered to you personally, then it's not at risk. However, having what appears to be a business asset registered in your name could make it more likely that the plaintiff might add you as a defendant on an alter ego theory.
     
  10. adjusterjack

    adjusterjack Super Moderator

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    Check your business liability insurance (if you have it) and see if there is coverage for copyright infringement liability.

    Read your policy. If you aren't sure, notify your insurance company's claims department of the lawsuit and let a claim rep tell you whether you have coverage or not. Don't rely on your agent to know.
     
  11. Daniel Bachelor

    Daniel Bachelor Law Topic Starter New Member

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    Thanks for the reply!

    I am not named as the defendant.

    I am personally the registrant of the domain. I purchased the domain years ago way before the LLC ever existed. I use PayPal to renew it every year. That PayPal has funds routed from my business bank account though. Could that become a problem?

    My LLC doesn’t really have any assets. It makes money from ad revenue which fluctuates month to month.

    Regarding them adding me personally to the lawsuit... what would be the point of an LLC then if they can just go after you personally? :(


    No insurance :/
     
  12. welkin

    welkin Active Member

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    Copyright law is complicated and it appears to me that you are the subject of what has become to be know as copyright trolls. That is/are companies that allege copyright infringement and ask for payment to settle instead of filing or pursuing a lawsuit.

    You have to answer the complaint and you need a copyright attorney to do that. You can't do it yourself. Beg, borrow, or steal the money to do so and do it ASAP.

    The use of a registered image is not always infringement. More often then not it is a Fair Use of the image to illustrate what your article is about. An attorney can determine if there was infringement or not.

    In simple form:
    Fair Use is a Balancing Test
    • Factor 1: The Purpose and Character of the Use.
    • Factor 2: The Nature of the Copyrighted Work.
    • Factor 3: The Amount or Substantiality of the Portion Used.
    • Factor 4: The Effect of the Use on the Potential Market for or Value of the Work.
    If you prevail on getting this dismissed you may recover your attorney fees.
     
    Last edited: Jul 16, 2021
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  13. adjusterjack

    adjusterjack Super Moderator

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    Exactly. The limitations of an LLC are not understood by many business people who think they should have one.

    Well, that was certainly a bad business decision.
     
  14. zddoodah

    zddoodah Well-Known Member

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    "Could be a problem" means a lot of things. Some problems are minor annoyances, while some are bad news. Is it possible that the plaintiff in the lawsuit, if it gets a judgment against your LLC, could argue that this is evidence of alter ego liability? Yes. Will that argument carry the die? If that's the only evidence, probably not. But you might still have to spend money defending against it.

    Good question. If you're maintaining proper separateness between your LLC and your personal finances, this won't be an issue. But not everyone who forms corporations and LLCs does that. I'd suggest googling "alter ego liability" or "piercing the corporate veil" and doing some high level reading. If the things you read give you concern, then please ask whatever questions you might have. All I'm saying is that you having a one-person LLC that (apparently) has committed acts of copyright infringement by way of a website where you personally own the domain could be evidence that would support an alter ego claim. However, again, as noted above, if that's all there is, you probably don't have anything to worry about.

    Except that the OP noted in his/her original post that a lawsuit has been filed and served.

    That's absolutely wrong. First of all, you don't have any statistics that would support your "more often than not" claim. Second, using a copyright protected photo "to illustrate what [an] article is about" is not fair use.

    Is it possible, in the abstract, that one or more of the 123 acts of infringement alleged by the plaintiff was fair use? Sure. However, we have zero facts that suggest it's a realistic possibility, so you suggesting that whatever the OP did is probably fair use is irresponsible.
     
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  15. Daniel Bachelor

    Daniel Bachelor Law Topic Starter New Member

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    Really appreciate everyone weighing in on this. I would really love avoid taking this to the courts because I fear it'll waste everyones' money and time. There isn't money to be had to be honest. I am in debt and have sacrificed a lot for my business because at the end of the day it's a passion project. At the same time, I understand where they are coming from. It would have been nice to have been given the chance to remove any photos they wanted, and if I didn't comply THEN file the lawsuit. They wanted money from day 1.

    I know no one can give me concrete advice, but what do you think of me responding with my best possible settlement amount $ and mention if they can't agree, then I'll consider filing for bankruptcy or closing the LLC. Thoughts?
     
  16. army judge

    army judge Super Moderator

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    A bankruptcy filing will always be available to you, even if the scammers obtain a judgment for $100,000,000.

    If you offer to settle, it might only increase the scammer's greed.

    If I were you, I'd say and do nothing.

    If I'm served with a lawsuit, that's the time to take action.

    If your finances are troubled at the moment, what other real options do you possess?
     
  17. Daniel Bachelor

    Daniel Bachelor Law Topic Starter New Member

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    Hello there.

    I was served with a lawsuit already. Now I'm in the stage where they want me to come back at them with some type of offer they can bring back to their client.

    I also fear offering any amount will open the door for them to try and squeeze more and more out of me - even if it doesn't exist.

    The absolute most I could do is a few grand before I would basically not be able to pay rent or my basic needs, which I can't do of course. I'm wondering if I tell them this is the most I can possibly do, and if your clients aren't willing to accept that then I'll have no choice but to eventually file for bankruptcy. Or should I just not say anything at all and wait for the default? That worries me a lot more than responding to be honest. Thoughts?
     
  18. army judge

    army judge Super Moderator

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    Never let your opponents see your hole card(s).

    Don't let the enemy know your battle plan.

    The only sure fire way out of the mess is a bankruptcy filing.

    If you offer the scammer $10,000 to settle, what will the next scammer demand?

    I'd see those bankruptcy lawyers Monday and Tuesday.

    Or, I'd begin researching "pro se bankruptcy in Nevada".

    This is a great self help book:

    How to File for Chapter 7 Bankruptcy Eighteenth Edition
    by Stephen Elias (Author), Albin Renauer (Author)

    The Federal BK Court offers a guide for pro se litigants -

    Filing for Bankruptcy Without an Attorney (Pro Se) | U.S. Bankruptcy Court, District of Nevada

    Now you just need to mull things over and decide what is best for you.
     
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  19. zddoodah

    zddoodah Well-Known Member

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    No harm in doing it. Just be prepared for the plaintiff's lawyer to assume it's NOT your best possible offer and respond with an attempt to negotiate you higher. BK threats don't typically resonate, but there's no real downside. Based on what you've told us, it sounds like you might be on BK's doorstep even without this lawsuit.
     
  20. welkin

    welkin Active Member

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    This is really bad advice because any law firm that would file 123 infringement claims in a single pleading would see the case through the court. I have to question if the lawsuit was filed with the court if they are asking for a settlement figure before defendant has answered. This law firm is a copyright troll looking for fast money.

    To make any offer to settle is an admission of guilt. Don't do it. Find a defense copyright attorney to review you case before you do anything else. If you can't do that then file an answer yourself denying each and every count of the complaint by the time to answer the complaint. Just deny and allege it was fair use. But you have to answer if it really is a filed complaint. Go to PACER on the internet and see if you can find the docket number.
     

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