Part 2 of 3: The Photographer’s Case

Last time, I discussed how The Color Run, a party with (as we’ll see) fairly sophisticated IP counsel, got into such a pretty bad, but avoidable, public-relations scrape with a freelance photographer, Maxwell Jackson, who is (as we’ll also see) very unsophisticated about IP. The main problem was that the parties were way too casual in licensing the photographer’s works for The Color Run’s use, and the parties ended up with two very different understandings of what The Color Run could do with the photographs.

Either they didn’t actually reach an agreement (a “meeting of the minds” as lawyers like to say), or they quickly forgot what they had agreed on. Whichever, they didn’t think to resort to the sensible but surprisingly rare expedient of putting in writing what they want. The Color Run just assumed it could use the photographs however it wanted*, and Jackson just assumed that The Color Run would help promote his business by attributing the photographs to him.**

* One can speculate how The Color Run came to this misunderstanding. Perhaps it thought it could ride roughshod over an individual photographer? More likely, in my experience, is simply bad internal communication—whoever used the photographs didn’t understand the scope of Jackson’s permission—or simply ignorance of copyright law. While The Color Run has good IP lawyers, that doesn’t mean that The Color Run’s employees even understand that photographs need to be treated with care.

** Jackson’s misunderstanding is more understandable than The Color Run’s because The Color Run told him how its promised link-back would be valuable promotion. Still, The Color Run didn’t promise anything beyond the link-back and didn’t say anything about attribution.

Still, there was hope! Potential adversaries have recovered from worse and have averted numerous lawsuits, but when they realize there’s a problem, measure correctly the size of the problem, and take measured actions. Which isn’t what happened here.

The Perils of Being a Licensee: Exceeding the License’s Scope

Let’s start by looking at the problem from Jackson’s point of view. You know what? He actually has a pretty decent claim for copyright infringement. This is because The Color Run (through its “photo director”) pretty explicitly limited The Color Run’s proposed use of Jackson’s photographs to just The Color Run’s Facebook page. Here’s what The Color Run’s “photo director” actually requested:

Would you be interested in letting us use some of your photos in an album on our Facebook page? … We’ll link back to your work in the album. Our other photographers have gotten some good exposure from this.

So, when Jackson agreed to this request, he was agreeing to let The Color Run to display (with necessary intermediate copying) certain photographs* on The Color Run’s Facebook page. In legal terms, Jackson had given The Color Run a non-exclusive license, whose scope is limited as above. But The Color Run obviously started using the photographs more broadly than that, such as on promotional posters and flyers and elsewhere on its website. At that point, The Color Run became an infringer.

* This isn’t as vague as a it seems. From the context, the photographs subject to the license would be those photographs that Jackson took of The Color Run event that Jackson had made available on the Internet.

This is a point worth emphasizing, and if you’re a licensee of copyrights, you should sit up and pay attention: if you stay within the scope of a license, you are a licensee; but if you exceed the scope of the license, you are an infringer to the extent you exceed the scope. You get no leniency just because some (or even most) of your uses are licensed—you’re treated like any other infringer for the uses beyond the license’s scope.*

* A little aside: the other danger The Color Run faced was that Jackson might be able to simply yank the license at will, meaning that The Color Run couldn’t even use the photographs on its Facebook page. Whether Jackson could or not depends on whether the license was “backed by consideration,” i.e., whether he got something of value in return for the license. That depends on whether linking back to Jackson’s “work in the album” is consideration. Whether “consideration” is sufficient is a question of state law, and since I don’t even know what state’s law would apply here, I’ll just leave the issue here.

Don’t Confuse a Good Claim with a Super-Awesome Claim; or, the Difference Between a Copyright Claim with and Without Statutory Damages

So if The Color Run is an infringer, and if The Color Run has competent legal counsel (which it does), why didn’t The Color come to some arrangement with Jackson but instead sued Jackson? While we’ll never know whether The Color Run sued Jackson out of exasperation (its view) or to put pressure on him, The Color Run’s actions stem from the same thing: Jackson’s unsupportable demand for $100,000.

But wait, some of you are asking: is $100,000 really unsupportable? Under the Copyright Act, a jury may award up to $30,000 per work infringed in “statutory damages,” which increases to $150,000 if the infringement is willful. Here, there are multiple photographs, so at $30,000 a pop, Jackson’s past $100,000 if there are just four infringed photographs. If a jury can award $80,000 for a downloaded song, surely a photographer can get $30,000 for an infringed photograph?

Putting aside the questionable wisdom of assuming willfulness* or maximum statutory damages, Jackson’s problem is simply that he wasn’t entitled to statutory damages. Why not? Because he didn’t timely register the copyright in his photographs with the U.S. Copyright Office.

* Licensees who exceed the scope of their licenses are typically not willful infringers, though not because they are licensees. Rather, such acts of infringement are usually accidental. The licensee lost track of or misremembered the scope of the license and honestly thought it was acting in accordance with the license. Still, with small companies and individuals, the difference between willful and non-willful infringement is rather like the difference between different methods of execution: either way, you’re dead.

Zen and the Art of Copyright Registration

Copyright registration is a deeply misunderstood and zen-like concept. Copyright arises from the moment to you fix your creative and original work in a “tangible medium” (paper, flash drive, canvas, marble, etc.). But you can’t enforce the copyright until you’ve registered the copyright (an inexpensive and not terribly difficult process, in most cases). In addition, you aren’t eligible for statutory damages for a given act of infringement unless you’ve registered the copyright before the act of infringement (or 3 months after you “published” your work, even if that’s after the act of infringement).

According to the U.S. Copyright Office’s records, there is no registration for “Maxwell Jackson”*. He also didn’t mention any registration in his letter.

* There is a Max L., a Max. R., a Maxcine, a Maxie, a Maximillion and a Maxine; there is no Maxwell.

This doesn’t mean Jackson can’t get damages under any circumstances and, therefore, can’t demand damages from The Color Run. But it does mean that damages are much more difficult to get under the circumstances. The two remaining measure of damages are “actual damages” (usually measured by the copyright holder’s lost profits) and “wrongful profits” (i.e., “disgorgement” of the infringer’s profits attributable to the infringement).* Sometimes, it’s easy to measure such damages. When a software licensee makes more than the permitted number of copies, you can just take the number of excessive copies and multiply that by the licensee fee per copy (actual damages). When a famous singer misappropriates your song, it’s pretty easy to figure out how much money everyone made from the song (wrongful profits).

* These two measures of damages often overlap. E.g., your lost profits are pretty much the same as the wrongful profits. In that case, you don’t get to double count.

But in this case, it’s not so easy to connect any money The Color Run made to The Color Run’s use of the photographs because The Color Run didn’t make money directly from the use. Instead, it used the photographs to promote its profitable activities. While it’s not impossible to measure the damages for promotional uses of a copyright work, you need to trace the use to the infringer’s profits. The classic case would be a television advertisement that misappropriated a song. With a lot of expert analysis, you might be able to connect the song to the advertisement to profits for the product being advertised for the time when then the commercial aired.

Here, though, the photographs were probably part of just one of several promotional efforts by The Color Run. There a lot of other reasons why people participate in The Color Run’s events that have nothing to do with Jackson’s photographs. Separating Jackson’s photographs from everything else that might have contributed to the success of the races might be beyond the skill of even the best expert.

And even if you could make the connection, it’s a very safe bet that the amount is much, much less than $100,000*. How much profit do you think The Color Run even makes from its races, and how much do you think Jackson’s photographs contributed to that profit? Maybe 1%? If The Color Run made $1 million during the period it misappropriated Jackson’s photographs, that amounts to about $10,000.

* It’s wrongful profits, not wrongful revenues.

Jackson’s calculation of actual damages is only a little better. On the one hand, there’s probably a sufficiently robust market for licensing photographs, based on which an expert could value the license to a particular photograph. On the other hand, the market for these particular photographs is probably limited to The Color Run itself. After all, who else would be interested enough in a photograph of Color Run participant wearing a Color Run t-shirt? In any event, the actual damages would pretty small: how much would you pay to a freelance photographer to license a photograph that you could use in promoting your event for a few months? You’d pay something, just not a lot. $10,000 or so, maybe?

The Color Run’s Move

The Color Run, again being advised by competent counsel, knew all this. It can search the online records of the U.S. Copyright Office. Jackson, obviously didn’t. One might imagine a conversation and Jackson going like this:

TCR: Look, we know we screwed up, but $100,000?

JACKSON: Yup. My step-father told me that’s the amount you should pay me.

TCR: Listen, that figure just has no basis in reality.

JACKSON: Oh, you can’t confuse me with your legal mumbo-jumbo!

TCR:

TCR: But…

TCR:

TCR: You know, what? Screw this, and screw you.

JACKSON: I’ll sue!

TCR: Not if we sue you first. Oh, and we can take our time because you freaking don’t have a copyright registration!

Next time, I’ll question the wisdom of The Color Run’s aggressive, preemptive lawsuit against Jackson and speculate how some anonymous IP counsel in Utah might have been the one to keep this lawsuit from spiraling into absurdity.

Thanks for reading!