What You Should Do If You Receive a Settlement Demand Letter for Alleged Copyright Infringement by your Website………

First – Do Not Ignore The Letter!

If you have received a Settlement Demand Letter, the first step is to determine if there is in fact an infringement.  An attorney can help you with this legal analysis. Often, the demand letter will provide insight into what they deem the infringing behavior.  Companies often send out scary letters demanding payment with the promise that if you pay the amount now, you can avoid being sued later.  The language in the letter is threatening and sounds “legal” and unless you know better, you pay without question.  At least that’s what they hope as they roll the dice and play the “numbers” game.  If they send enough scary-grams, they’ll make more money than it costs them to send the letters.  A certain percentage is likely to pay, so, it is a winning proposition.

What is a Settlement Demand Letter?

A settlement Demand Letter can be two things:

• Settlement demands often contain an order to “cease and desist” (to stop using an unlicensed text or image).  This is seen as a first legal step before someone asserts their copyrights in a more formal way (such as mediation, arbitration or court.  In many cases the goal is settling outside of court or entering a license agreement where you pay for use).
• But the second and main purpose of a Settlement Demand letter is to get you to enter into an agreement to pay a lump sum in exchange for not suing you.

Do Immediately “Cease and Desist”

As soon as you are made aware that you are potentially violating copyright laws, remove the allegedly infringing text or image(s) and notify the alleged copyright owner that the material has been removed.  They will recheck to see if you are telling the truth.  They may require you to remove it in cached or indexed copies of your site as well.

Removing the image as soon as possible is critical – although you may be able to claim ignorance up until you were informed unless you were told, or there is a paper trail to show there was no question that you knew before receiving a demand letter.  Even if you plan to dispute ownership or user rights, remove it immediately.  You do not want to escalate the dispute and do want to show both your good faith and that you take the letter seriously.

It is also important to understand that ignorance is not a legal defense.  If you own a website that has images (or content) that you did not know was potentially infringing because someone else did the work or posted the image, it does not matter.  If you are the website owner, you are accountable.  However, if you end up in court, a judge is likely to consider the facts and reduce any damage awards you pay based on whether or not you were knowingly violating copyright laws, and if and how quickly you removed images once you were officially notified.  If you had a good contract with your website designer, you may be able to recover your losses through an indemnity claim.

Don’t Forget File Copies

Simply removing an image from a website or blog will probably not be enough to satisfy the copyright owner.  You must also remove the image from backup files and memory.  You need to do two things:

• Open the post or web page itself where the image appears and delete the image.
• Then find where the actual image file is stored and delete that file as well.

As long as a file copy of their image is on your website, even if no one can see it on your website, you are violating copyright laws.  In other words, if they can prove you still have it in your possession on a public server where the copyright owner can locate its image in a display, it will complain you are still in violation of copyright law.

Removing The Image Does Not Let You Off The Hook

Removing all unlicensed images is a good first step to take – it will help reduce the potential of incurring higher damages.  However, removing the image will not absolve you from any legal liability for past use.  The copyright owner will probably demand some amount to pay for both the unauthorized use and reimbursement for their attorney fees.

Be Professional and Apologetic

Apologize for the oversight and offer any reasonable explanation you can.  Threatening back is a bad idea for many reasons.

If you decide not to get an attorney and try a do-it-yourself approach; call the number indicated in your letter and remain calm, but assertive,s and ask if they will negotiate to settle for a more reasonable settlement number.  Be prepared that they are unlikely to let you off scot-free, but they are likely to negotiate.  It is hard to know how negotiable their demand will be so you’ll have to do your best arguing.

Be sure to document the call, including when you called (date and time) and who you spoke with and what they said.  If the person refuses to immediately give you their name ask for their supervisor.

The main purpose of your call is to establish contact and show that you received and are responding to their allegations.  Ignoring it will likely lead to escalation of the conflict.  You want them to know that you were not aware of the violation but since being made aware, you have removed the image(s) or content.

If you plan to hire a lawyer to deal with the copyright owner, do not even call them – call the attorney first.