Steve Pigeon, president of Toronto-based Masterfile, told Selling Stock that his company was just awarded $600,000 (plus $5,754.34 in attorney’s fees and costs) in a copyright infringement suit against a Georgia printing firm.
The lawsuit involved 20 images, which FastImage of Lithia Springs, Georgia, used on its Web site without purchasing a license through Masterfile. It is unclear for how long these images were in use between the time they were registered with the U.S. Copyright Office in July 2000 and when the infringement was discovered last year.
“The key to our success in protecting copyright and pursuing infringers is based on having solid contracts with each of our exclusive contributors, registration of the copyright in all the exclusive content we post to our Web site, meticulous record keeping, timely and accurate reports from PicScout, dedicated staff to handle the incoming reports, assess them against our usage history databases, notify infringers (always initiated in writing and generally via FedEx to prove service), and conscientious follow-up and documentation of active files to work toward a fair resolution.” – Steve Pigeon, president, Masterfile
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The original complaint, filed last October, alleged that Mastefile’s images were displayed at FastImage’s site—currently offline—through July or August 2009. When FastImage did not show up to defend itself, the Atlanta Division of the U.S. District Court for the North District of Georgia issued a default judgment of $30,000 in statutory damages for each of the 20 infringed works, plus additional legal expenses, on December 18.
Atlanta law firm Kilpatrick Stockton represented Masterfile in this action, and Pigeon says the company works without a dozen others throughout North America and Europe, as needed. Masterfile also has about 10 staffers, or 10% of its workforce, dealing with copyright compliance issues and continues to use PicScout’s image-monitoring service.
Despite the scale of this legal activity, the company collects considerably more than it spends. Pigeon declined to disclose specifics but said: “It’s a growing segment of our business, although I wish it wasn’t.”
Masterfile typically has dozens of active lawsuits, but most of its claims are settled through direct negotiation with infringing parties, without the assistance of legal counsel. As to litigation, Pigeon feels there is little choice: “In today’s world, where information is so public, it doesn’t pay to bluff. If you threaten legal action but don’t follow through, that will soon become common knowledge in the blogosphere and you won’t be taken seriously. Masterfile doesn’t like to litigate—and we are reasonable when dealing with reasonable people—but we don’t hesitate to litigate once reasonable means have been exhausted.”
Litigation in itself is not a moneymaker but a necessity of remaining in the business of managing and licensing intellectual property, maintains Pigeon. Despite numerous awards and a net profit for Masterfile, he cautions that litigation can be difficult to manage, particularly for the solo practitioner: “Our aggregate costs of litigation are spread over hundreds of infringement files over the course of a year, so we can afford to take some losses in order to maintain our principles and protect our artists’ copyright. However, for individual photographers or small stock agencies, the cost of one or two lawsuits could outweigh the benefit of any income derived.”