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Imagine you own a popular family restaurant in Tampa, Florida. One day you receive a multipage letter from a law firm in Nevada threatening a lawsuit unless you pay for your "illegal misappropriation" of three copyrighted images. What images, you wonder to yourself. And where have you used them? After all, you have no need to advertise.
As you turn the page, you see the images. One is a generic photograph of a burger with fries; the next, a bland photograph of a glass of soda; and the last, a cartoon image of a bucket of chicken wings. You have no recollection of ever seeing these images. On the next page, you find copies of four-year old posts from your restaurant's Facebook page that you hardly use anymore. Each post contains one of the images. You realize that a summer employee likely pulled them from the Internet and used them for your Facebook page.
The amount demanded by the law firm to make your problem disappear: $18,000! You stare in disbelief. You read on: "If forced to litigate, the plaintiff could be entitled to statutory damages and attorney's fees many times higher than the offered settlement amount."
Intellectual Property "Trolls"
Intellectual property "trolls" regularly initiate this all-too-real scenario against businesses and individuals to enforce intellectual property rights of marginal value. "Like the proverbial troll under the bridge, [trolls] try to extract rents from market participants who must choose between the cost of settlement and the costs and risks of litigation."1
As the United States Seventh Circuit Court of Appeals has noted, such lawsuits illustrate "the challenge in administering intellectual property law to discourage so-called intellectual property 'trolls' while protecting genuine creativity."2 Instead of advancing "the goals of the Constitution's intellectual property clause," "troll" lawsuits "amount to an intellectual property shakedown."3
How the Internet Fuels Copyright Troll Lawsuits
Increased use of the Internet and social media for marketing purposes has driven intellectual property troll lawsuits to a new high. Copyright trolls use sophisticated software to scour the Internet for potential users of whatever works – usually photographs, videos or images – they claim to be protecting. Once potential defendants are identified, copyright trolls send letters threatening potential defendants with liability for statutory damages and legal fees, regardless of whether such a recovery is even possible.
Sometimes, the threatened lawsuits aim to embarrass rather than to recover legitimate damages. In the 2010s, for example, adult film producers filed "a 'nationwide blizzard' of copyright infringement actions ... against large numbers of Doe defendants identified only by their Internet Protocol ("IP") addresses."4 The plaintiffs in these lawsuits knew that most of the yet-to-be-publicly-identified defendants would gladly pay unjustified sums to settle what would otherwise be embarrassing lawsuits if their names were publicized.
The New Wave: NIL "Troll" Lawsuits
More recently, there has been a deluge of litigation brought by Name, Image and Likeness ("NIL") trolls. NIL trolls seek to exploit legislation permitting recovery for unlicensed commercial uses of a person's image or likeness to extract outrageous and unworthy financial settlements. Like copyright trolls, NIL trolls use computer software to comb the Internet for use of images, even in places as innocuous as social media. An ongoing wave of NIL troll lawsuits have been brought on behalf of dozens of formal models and actresses against bars and night clubs nationwide. A favorite tactic of these NIL trolls has been to try to denigrate and embarrass the business owners due to the nature of their establishments to compel settlements wholly disproportional to any actual harm.
Three Steps to Protect Your Business: Prevention, Knowledge, Action
- Prevention
Prevention means making sure that those marketing a business's goods and services – whether employees or outside marketers – are properly educated and instructed on what they can and cannot do. For employees, this means knowing that photographs and images should not be used for marketing unless the employer clearly has the right to their use. If a photograph or image seems available online for free commercial use, prevention includes understanding and complying with any requirements that attach to that use.
For businesses using outside marketing companies and independent contractors for advertising, prevention means having written contractual provisions guaranteeing use by the outside marketers of properly obtained photographs, images and text with indemnification provisions for violations. In all cases, prevention means meaningful limits and controls on the use of Artificial Intelligence, which can sometimes incorporate protected images or text without the user's knowledge.
2. Knowledge
Knowledge means being informed of the actual threats posed by intellectual property trolls. If prevention fails and a business encounters a menacing troll demanding a ludicrous toll, it is important to confer with qualified intellectual property counsel who can provide advice on whether a given threat has any merit. If the author of a copyrightable work has not timely registered the copyright with the United States Copyright Office, the copyright troll will have no ability to acquire attorney's fees or statutory damages. Raising this point in itself can turn an aggressive troll into a scurrying mouse. Even if a copyright troll does have a timely registration, a survey of licensing fees for similar photographs will often demonstrate a much lower level of potential damages.
Similarly, whether NIL trolls have plausible causes of action can depend on whether a plaintiff has retained NIL rights in his/her own photograph, whether he/she is clearly identifiable in the photograph as used, whether his/her image is used for commercial purposes and whether he/she is simply one of many in a crowd. Even if a NIL troll has a plausible cause of action, many NIL trolls base their settlement demands on unrealistic and/or legally improper theories. For example, a current practice is to base settlement demands on licensing fees commensurate with paying for full modelling sessions at today's dollars instead of the proper standard – paying for a license to use the single image in question. Never allow a NIL troll to dictate what the relevant law is or what how reasonable damages would be calculated.
3. Action
The most effective response to an intellectual property troll can be action. Intellectual property trolls depend on targets rolling over and paying undeserved settlement amounts to avoid litigation. It can be in a business's interest to litigate, but only if the business litigates intelligently. Trial court judges have become well aware of the tactics employed by intellectual property trolls and many refuse to reward trolls for their tactics.
In a 2023 copyright case in the Middle District of Florida, a troll copyright plaintiff accepted an immediate offer of judgment from the defendant to settle a case for $1,200, but then filed a motion with the court seeking an additional $6,000 dollars in attorney's fees. The district court scoffed: "Plaintiff is awarded $500 in fees, which more than compensates Plaintiff for the fees incurred recycling a well-worn complaint, securing immediate compliance with the demand to remove the challenged photograph and negotiating a nominal settlement."5
Similarly, in a case from the Northern District of Illinois, the federal district court awarded attorney's fees to the defendant, commenting: "Defendant has presented persuasive evidence and argument ... that plaintiff's motivation in filing this action was to obtain proceeds from a settlement rather than to protect against infringing use of his copyright."6
Action also means demanding that intellectual property trolls provide the evidence necessary to support their claims such as copyright ownership information, licensing information and proof of alleged damages. Requests for such discovery can expose the extortionist schemes of intellectual property trolls and is useful for demonstrating that the troll in question is motivated solely by the lure of settlements, not by any genuine desire to protect intellectual property.
Facing a copyright or NIL "troll"? Don't pay without understanding your rights. Reach out to Joe Weissman and Johnson Pope's Intellectual Property team for guidance.
Footnotes
1. Design Basics, LLC v. Lexington Homes, Inc., 858 F.3d 1093, 1097 (7th Cir. 2017).
2.Id. at 1096.
3.Design Basics, LLC v. Signature Constr., Inc., 994 F.3d 879, 882 (7th Cir. 2021)(quotation omitted).
4.Patrick Collins, Inc. v. Does 1-38, 941 F. Supp. 2d 153, 155 (D. Mass. 2013).
5.Sadowski v. Site Spin Off. LLC, No. 8:23-CV-00297-MSS-SPF, (M.D. Fla. Aug. 17, 2023).
6.Craig v. PopMatters Media, Inc., 448 F. Supp.
3d 844, 847 (N.D. Ill. 2020)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
