Before You Take Action

You work hard as a small business owner: working long hours, paying your bills, managing a chaotic schedule – and you do everything you can to legitimately promote your business in the community – and online.

But one day, you receive what looks like a serious legal claim demanding payment, simply from downloading a photo and posting it on your website – months or even years ago.  The urgent letter might say it’s from a law firm out of state that represents a (often foreign) client who is trying to sue you for copyright infringement.  More alarmingly, you may only be given a short time frame to respond to the demand letter before a threat of action is taken (so you don’t have time to get the facts and understand your rights). A “settlement offer” is usually included with the letter and might offer a “discount” or suggest that your insurance provider can pay on your behalf (if you have insurance).  A “convenient” link to pay online might be provided.

Before you act, understand that you are one of thousands of small business owners that might be a victim of this extortion scheme.  Predators know that small businesses are more likely to pay these fees because they do not have in-house legal counsel and most can’t afford outside legal counsel.

Know Your Rights

Currently, this matter is under review on Capitol Hill and legislators are well aware of this problem, particularly for small businesses who have been served trolling letters. To date, there are no mandatory or discretionary sanctions that punish copyright law firms or other “creative” companies who are abusing the system and demanding high dollar payment from companies just like yours.

• Before you act, understand that you are one of thousands of small business owners that might be a victim to this extortion scheme.
• Be aware that once a lawsuit is filed in court, it is up to the Plaintiff (in many states) to prove that there is a relationship with the client to ensure that the client is not just an entity (many times foreign) set up by the representative who is threatening to sue you.
• Be aware that in many states, IP tracking (the method used to find your alleged copyright infringement) must be performed by a 3rd party that is a registered private investigation firm.

How To Respond

So what do you do?

First, don’t panic!  As a precaution, you can start by immediately taking down the photo in question from your web site.  Keep in mind, an out-of-state plaintiff/law firm must file a lawsuit in the state where you do business, which makes it more difficult for many copyright infringement accusers to execute on a threat to fight you in court.

Second, never respond directly to an attorney who sends you a demand letter – you’ll run the risk of making the situation worse by providing evidence that could be used against you.  If you absolutely must respond, always use a legal representative.

Third, know the law and the players (and urge them to revise the Lawsuit Abuse Reduction Act to prevent these settlement shakedowns).

On Nov. 8, 2017, The US Senate Judiciary Committee met to discuss how to fix current law to prevent lawsuit abuse (“The Impact of Lawsuit Abuse on American Small Businesses and Job Creators“).  The National Federation of Independent Business’ (NFIB) Senior Executive Counsel, Elizabeth Milito, testified on why the current legal system should impose sanctions on those who abuse the system.  Sen. Chuck Grassley leads the effort in combating lawsuit abuse: