Practicing medicine is no longer exclusively characterized as providing patient care. A physician is now required to be a skilled clinician, a marketing guru, an entrepreneur, an accountant, and a legal savant, given the level of financial hurdles and oversight that is required to run a successful practice today. With the advent of digital media marketing, a physician must also now add “web designer” to his or her skill set. While private practitioners and institutions may have little in common in the way of operations, a common factor between them is that each seemingly must have a website or other online presence in order to compete in today’s marketplace.
Whether this task is tackled by senior management or is delegated to a hired intern, many physicians are involved at least to some extent in their website development and the creation and posting of marketing content. Understandably, strictly sticking to substance often results in a dull website, which could potentially hamper ongoing marketing efforts and the original intended result of the marketing in the first place: to increase patient flow. To entice potential patients and referral sources, many practices seek to create website content with character, using images to add color and points of interest to the presentation. However, an often overlooked consideration is whether the images that are chosen for a website are protected intellectual property, and whether their use without permission could lead to potential exposure for an unaware user.
Empowered by recent court decisions, image owners are increasingly filing claims for copyright infringement. Under the law, anyone who violates any of the exclusive rights of a copyright owner has committed copyright infringement. The law does not require that the defendant commit the infringement willfully—the infringing act itself is enough to impose liability, meaning that a company that unknowingly uses copyrighted images without the owner’s permission can be held liable for infringement. As for damages, an infringer is liable for either: (1) the copyright owner’s actual damages and any additional profits of the infringer; or (2) statutory damages, which can be adjusted upward or downward based on the infringer’s culpability, or level of willfulness. Copyright owners often opt to sue for statutory damages, available only in limited circumstances, when the actual damages and additional profits are difficult to calculate.
As an example, in October 2013, a jury awarded microscopic photographer Andrew Paul Leonard $1.6 million in actual damages for his copyright infringement claims against Stemtech International, Inc, a manufacturer of nutritional supplements that are sold through a network of more than 40,000 independent distributors (Andrew Paul Leonard v. Stemtech Health Sciences, Inc [C.A. No. 08-067-LPS-CJB]). Stemtech made the fateful mistake of copying 2 images—without Leonard’s permission—for use in all of their promotional materials, including brochures, videos, DVDs, and websites. Stemtech was aware that it was using copyrighted images, because it had previously paid Leonard annual licensing fees for the use of his images.
From the facts that could be gleaned from the court docket as of this writing, with the official trial transcript set to be publicly released in late January 2014, this unique case epitomizes the worst-case scenario for a company that copies online images for its own use without obtaining the proper permission to use them. The jury concluded that Stemtech was liable not only for its own direct copyright infringement, but it was also liable for the vicarious and contributory copyright infringement for all of its independent distributors who had also used Leonard’s images in their marketing materials, which contributed exponentially to Stemtech’s monetary exposure. Because Stemtech’s marketing policies require that its independent distributors use only its replicated website and marketing materials to market or sell its products, Stemtech ended up using each copyrighted image abundantly for multiple years. Another factor that caused the actual damages to skyrocket was the jury’s likely acceptance of the $1500 fair market value rate for Leonard’s licensing fee, rather than the average licensing fees of ~$125 and ~$226 for each of the 2 respective images that were actually charged by Leonard during the relevant time period. It should be noted, however, that Leonard v. Stemtech is still not over; the 2 parties are currently briefing postjudgment issues, and there is always the prospect of an appeal.
Granted, it is unlikely that another company would be liable for the $1 million-plus in damages that the jury awarded Leonard without achieving the perfect storm of damage variables—a high fair market value licensing fee, numerous instances of infringement resulting from the distributors’ use of the images in their own marketing materials, multiple years of violations, and actual knowledge of the infringing activity. A more probable scenario is a medical practice procuring an image from the Internet and using it for its own use on its website without the awareness or knowledge of whether that image is copyrighted.
Under such circumstances, it is not unusual for such activity to result in a demand for money for copyright infringement now that copyright creators (and hungry collection agencies as well as plaintiffs’ attorneys) are able to use “web crawlers” to identify copyrighted images that are being used without permission.
In fact, some companies use these tactics to generate “robo letters” on behalf of copyright owners for collection purposes, sending demands for payment to alleged copyright infringers en masse. (In the web community, Getty Images is notorious for this practice.)It is also not unusual for such demand letters to cite copyright infringement as justification for extortion, claiming entitlement to excessive fees in exchange for warding off the threat of legal action.
Many times, the recipient of a copyright infringement demand letter is the unknowing business owner who is guilty of nothing more than haphazardly selecting images from the Internet to create a more appealing web presence. In many instances, the selected images may not contain the mandatory statutory notifier, or the copyright mark (©), which could possibly mitigate the potential exposure for statutory damages because the image is not clearly identified as protected intellectual property.
Further mitigating any potential exposure, this time for actual damages, is whether the image is used for the economic benefit of the user, and whether any profit may be tied to the image’s use, as was the case in Leonard, where the images were tied to profit because they were prominently displayed on marketing materials. Depending on the circumstances surrounding the use of a protected image, any potential exposure for the misuse of such an image may range from very minimal to somewhat defensible, as it was in Leonard.
The recommended best practices that can help to avoid copyright infringement exposure entirely include either avoiding the use of copyrighted material or securing the proper licensing rights to the copyrighted material before using it. Many professionals outsource their content creation or content management, so before engaging a third party to perform such services, it is important to inquire whether the company invests in protective measures to avoid the misuse of copyrighted content, and, when possible, incorporate indemnity protection into your vendor contract with the third party against any misuse that may occur as a result of its efforts. In addition, should you find yourself in receipt of a demand letter alleging the misuse of copyrighted material, do not send a check without contacting an attorney and performing proper due diligence regarding the claim.
For a review of any contract with a third party that is responsible for content creation or management on your behalf, or for assistance/defense of any claim of copyright infringement, contact Caroline or Jennifer to discuss your options.
Caroline P. Wallitt, Esq, is a partner of Kirschenbaum & Kirschenbaum, P.C., and specializes in representing clients, especially those in the healthcare sector, in litigation, arbitration, mediation, and prelitigation disputes. She may be reached at 516-747-6700, x305, or by e-mail at CWallitt@kirschenbaumesq.com. Jennifer A. Kirschenbaum, Esq, is a partner of Kirschenbaum & Kirschenbaum, P.C., and specializes in representing healthcare clients in transactional, regulatory compliance, and general practice matters. She may be reached at 516-747-6700 x302 or by e-mail at JKirschenbaum@kirschenbaumesq.com. For more information about the firm, visit www.kirschenbaumesq.com.