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00:00:11.839Hello and welcome to Legally Bond, a podcast presented by the law firm Bond Chenik and King.
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00:00:13.759I'm your host, Kim Wold Price.
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00:00:19.519Today I'm joined by David Nasilli, a patent attorney and member of the firm working out of Bond's Therapies Office.
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00:00:21.679Hey Dave, welcome to the podcast.
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00:00:24.559Of course.
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00:00:25.600Thanks for joining us.
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00:00:27.519Thank you for saying yes to my invitation.
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00:00:42.159So today I'm hoping we can focus our conversation on how inventors and businesses can respond to third-party demand letters with a particular focus on copyright infringement claims, maybe some questionable online image claims.
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00:00:44.479And I guess we call them trolls.
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00:00:48.079Is that what sort of the affectionate nickname for some of these folks are?
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00:00:53.039But talk about that kind of letter that a client or a business of some kind might get.
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00:00:54.560So does that work for you today?
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00:00:55.759Absolutely.
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00:00:56.960All right, terrific.
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00:01:08.799Well, this is a practical business topic, and I don't think all businesses, especially smaller businesses probably, but businesses of all size can get these types of actions, right?
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00:01:11.599Or alleged potential actions against them.
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00:01:17.200So this is practical, causes immediate anxiety, there's real cost and a lot of uncertainty.
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00:01:20.480So I'm excited to sort of dive into this conversation with you.
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00:01:24.480But before we do that, on the podcast, it's a bit of a tradition.
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00:01:28.000We ask our guests to please talk a little bit about themselves.
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00:01:34.879So whatever you'd like to share about your background, where you went to school, family, whatever you think uh works for today.
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00:01:40.239Well, I grew up in Auburn, New York, or factually known as the West Side of Syracuse.
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00:01:50.560On my way to Ithaca for Cornell University for a degree in biological sciences, and then ultimately uh Syracuse University College of Law for my law degree.
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00:01:59.599I then studied and took the patent bar and became a registered patent attorney to practice in the Syracuse, New York area.
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00:02:00.560Terrific.
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00:02:02.640And Bond wasn't your first law firm.
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00:02:04.319He came to us how long ago?
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00:02:07.840I joined Bond in 2003.
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00:02:14.800I had been fortunate enough to meet a fantastic mentor while I was in law school and worked with him closely.
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00:02:18.479And then he made the move in 2003 and I followed along.
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00:02:20.560And we could say that's George, right?
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00:02:22.159We could say it's George McGuire.
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00:02:23.039Yes.
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00:02:24.800That's terrific.
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00:02:25.919Okay, very good.
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00:02:33.439So would you mind also sharing a bit about the kind the types of clients you and the IP team at Bond might advise?
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00:02:52.240Our client base really runs the gamut from everything from student university inventors that have started up right through Fortune 50 companies that are publicly traded and have you know patent portfolios that span the globe.
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00:02:57.280Yeah, it's wild the size of the practice and the and the variety that you all really have.
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00:03:04.560And you cover everything from patent prosecution to litigation, trademark, copyright, all areas of intellectual property law.
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00:03:05.360Is that right?
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00:03:06.479Yeah, that's correct.
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00:03:12.639I mean, practicing in upstate New York, um, generally patent attorneys will handle uh trademark filings.
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00:03:18.639Um, we don't usually have trademark specialists in law firms and smaller to mid-sized regional law firms.
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00:03:19.759So we handle that.
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00:03:36.560And then as a consequence of being intellectual property attorneys, we also handle most of the copyright issues that come up, whether it's in a labor context or infringement context, when the terms of the types of uh demand and cease and desist letters that we'll talk about today.
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00:03:47.680And you know, as you say that, I remember that when I was um uh working uh at the university, and I was a client then, I suppose, of Bond.
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00:04:01.520And I received one of these letters, and I do remember the anxiety, and it was um someone saying I couldn't call a student series of programs a certain name because they had trademarked that.
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00:04:05.039And so it was really made me angry too.
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00:04:08.879Uh so for those of you who are listening who may have received these, this is real.
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00:04:13.520I understand the reaction that you might have to what we're talking about today.
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00:04:24.399I don't think anyone wants to receive a letter, usually now via email, that accuses them of violating some federal law and that they could be the subject of a lawsuit.
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00:04:31.279That certainly is scary and oftentimes maybe unwarranted, but nonetheless received all the time.
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00:04:32.079Exactly.
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00:04:37.279And of course, my first reaction was to tell my boss and then call a letter.
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00:04:39.519But anyway, uh at bond, of course.
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00:04:45.040So for many businesses, the first reaction to a demand letter may be panic and concern.
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00:04:48.000And in my case, of course, I mentioned it was anger.
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00:04:57.040So, Dave, when a company receives a demand letter alleging some type of intellectual property infringement, and I think it's important that you point it out, right?
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00:04:59.759You're being told you violated federal law in some way.
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00:05:02.399That's what this person is sort of accusing you of.
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00:05:07.360What's the first thing the company should do before reacting substantially?
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00:05:16.480Well, I mean, the easy answer is contact outside counsel, but it's easy for me to say that because I have three kids I have to put through college, mostly at the same time.
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00:05:18.000So we'd love to get those calls.
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00:05:20.639But no, really, the first step you should do is investigate.
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00:05:27.920You don't know when you receive that letter whether it's spam, whether it's a scam, or whether there's a legitimate claim.
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00:05:36.319So we really need to just take a step back, look at the allegations that are being made, and then investigate and see whether there's any merit to those claims.
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00:05:39.279And then yeah, so how would they do that?
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00:05:40.240What would you recommend?
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00:05:46.160How do they distinguish between something that needs to be taken very seriously and maybe something that needs a more skeptical look?
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00:05:50.480Um, that's very hard right now because we do see so many scams.
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00:05:55.519Um, things like trademarks or uh addresses are now in public databases.
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00:06:02.560So it's very easy for anyone to send something that looks like official government correspondence or official notices when they are.
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00:06:09.279So we really have to take a look at what are they asserting in the context of copyright infringement, if it's image use.
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00:06:14.399Is that image actually used on your website or wherever they claim it's been used?
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00:06:21.120Um, if you can find that image, chances are the claim might be more legitimate than just a scam letter.
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00:06:22.399That's interesting.
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00:06:31.120So I suppose they could just find an image and send it out to a whole bunch of businesses and people react first before checking their website to see if it's even up.
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00:06:36.160Yeah, usually those demand letters are not seeking significant funds.
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00:06:41.439And I say when I say significant, it's usually in the neighborhood of maybe$500 to$2,500.
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00:06:53.839So I think there's a hope that companies that receive the letters may just react and process it like an invoice and send it off to their accounting department for payment and not really give it any thought.
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00:07:01.680So we have to take a look and see is it a legitimate claim before we worry about a monetary demand that's been made in the letter.
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00:07:02.319Right.
00:07:02.399 -->
00:07:06.879So what are some of the other, I mean, that seems like it would be a mistake to react that way, right?
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00:07:08.319You should do your research first.
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00:07:15.920Are there other mistakes or should I say missteps that organizations might make in the first few days after receiving one of these letters?
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00:07:44.480I think the other problem that happens is sometimes these get dismissed as being scams, and if they're legitimate, there are a lot of reasons why we want to make sure we investigate and respond in a timely fashion, whether it be for the reduction of potential damages if there's ongoing infringement, or to make sure that if there's any business insurance that's applicable, that we provide timely notification to the insurer to make sure that they don't have an easy way to deny a claim.
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00:07:45.680Right, right.
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00:07:50.160That is absolutely when you're in-house an important first step.
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00:07:52.160So, all right, let's move.
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00:07:56.160Do you mind if we move on to copyright infringement and talk a little bit about that?
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00:07:57.360Absolutely.
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00:08:03.360All right, so copyright claims that tend to be more legitimate, particularly maybe music rights claims.
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00:08:10.639When a business uses music in a live setting, what should it understand about public performance rights and the need for a license?
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00:08:26.480I think that the easy bright line rule to keep in mind is that anytime you play music anywhere where more than a small group of friends or family can hear the music or enjoy it, chances are it's an instance that needs to be licensed from an appropriate entity.
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00:08:29.600So if you do so without a license, it can constitute copyright.
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00:08:32.559Yeah, that's that's wild.
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00:08:42.320So why is it important for businesses to understand that a license from one agency might not be enough depending on which songs or catalogs are involved?
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00:08:44.480It seems like this is really complicated music.
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00:08:46.639Do you want to kind of take us through this a little bit?
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00:08:47.279Sure.
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00:08:48.720Well, just back up a second.
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00:08:51.440I mean, there could be it could be movies, it could be music.
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00:08:57.519We've seen claims for nursing homes that in common areas play music or play movies.
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00:09:03.679So anywhere you can think of where music is played or even a movie is played can lead to these types of claims.
00:09:03.919 -->
00:09:13.200And most people seem to think that if they own a CD or maybe turn the radio on, that they're not violating copyright infringement because they own that copy of the work.
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00:09:22.320So we really have to take a look at the context and whether and how the music is being used and whether it needs to have a specific license.
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00:09:33.679Um, and in this case, you know, public performances of music are governed by um licenses from three to four different main or major agencies.
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00:09:38.720And actually, there's a couple smaller ones, and they each have different libraries of music.
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00:09:47.360And in some cases, the same song by different performers, that particular sound recording might be managed by different agencies.
00:09:47.600 -->
00:09:50.879The most common are BMI and ASCAP, if you've heard of those.
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00:09:57.600They're the kind of the premier licensing agencies, but there are a few others that have um surfaced recently.
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00:10:10.399Well, I'm thinking about our higher ed clients in the classroom and how faculty often think you know academic freedom is there or for educational purposes, but that can be an issue too, can it?
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00:10:16.480There are some exceptions for educational use, particularly if it's face-to-face teaching.
00:10:16.639 -->
00:10:23.840But if we're playing music just for the enjoyment of having music on, that's an instance that can uh lead to a third-party claim.
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00:10:25.120Wow.
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00:10:27.840So also we have social media, right?
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00:10:32.559And you get the option sometimes when you post to pick a song that goes with it.
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00:10:39.600So, how is online or social media use of music different from live performance use from a licensing perspective?
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00:10:47.120Yeah, unfortunately, streaming rights are controlled by completely different entities than the ones that control performance rights.
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00:10:56.240So if you have an ASCAP or BMI license, that doesn't mean that you can append music to your social media posts, particularly for advertising.
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00:11:03.279That's a separately licensable action that you need to make sure that you have the proper permissions in place to do so.
00:11:03.519 -->
00:11:12.559Now I know many social media vendors include music that they've licensed for those purposes that you can select from the songs that they have.
00:11:12.720 -->
00:11:20.639But if you're recording third-party music and adding it to your social media posts, it could very well likely lead to a claim of infringement.
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00:11:22.080That's wild.
00:11:22.240 -->
00:11:31.679So it's it's really broad, and there are a lot of different things that people may do fairly commonly are included here.
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00:11:36.159Yeah, it's it really is all-encompassing, and we touch it in very different ways.
00:11:36.240 -->
00:11:44.480And each different way we use music or or um saved media like music and movies can lead to claims of infringement.
00:11:45.039 -->
00:11:49.919So if a client does receive a music rights demand, what are you looking for?
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00:11:53.440What do you want to see first if they come to you as their attorney?
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00:11:56.639The first thing we look at is what were the circumstances of the use?
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00:11:58.080Was it a public performance?
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00:11:59.120Was it private?
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00:12:07.360If we determine that it is the type of use that needs to be licensed, then we ask, okay, what if any licenses do you have in place already?
00:12:07.519 -->
00:12:12.639You know, the the classic, you know, elevator music or musac, you know, you can you can license that.
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00:12:15.840There are licenses that are out there, and many people have them.
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00:12:20.639If you're a bar or restaurant, hopefully you know that you need to have your ASCAP and BMI licenses.
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00:12:31.200And when you have live bands perform, you've looked at their set lists and cross-check them against the music libraries of those licensing entities to make sure that you have the appropriate license.
00:12:31.360 -->
00:12:39.360What we see these days with social media is that you know, attendees of events often record them and place them online.
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00:12:39.919Yes.
00:12:40.159 -->
00:12:53.519And it's very easy for music licensing companies now to scrub the internet and social media to look for instances where music has been publicly performed and the particular location does not have a license in place.
00:12:53.679 -->
00:12:56.879So it's it's very, very easy to find infringement these days.
00:12:56.960 -->
00:13:05.679So you're much more likely to get a letter than you would have 20 years ago when nobody knew what songs a particular band was playing at a live performance.
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00:13:06.639That's right.
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00:13:07.600Wow, that's wild.
00:13:07.759 -->
00:13:19.360I hadn't thought about all of that, you know, and I see those posts all the time from people who are posting that they're at whatever major concert they're attending or local pop or art.
00:13:19.679 -->
00:13:20.879That's pretty wild.
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00:13:23.759See, I learned something about IP today.
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00:13:25.120Um, all right.
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00:13:27.039So the other thing is images, right?
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00:13:36.720And in our house, we've taught our children early to make sure that it's available for public use before they use any images, even in their um school projects and other things.
00:13:36.879 -->
00:13:43.840But copyright claims and images, can you explain how some image rights enforcement companies might operate?
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00:13:47.200I think people often think, oh, I this is a lovely photo.
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00:13:49.919I can use it for whatever they want to use it for.
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00:13:54.720An invitation to an event on their own website if they have a small business.
00:13:55.279 -->
00:14:02.000So what are the what's the practice of acquiring image portfolios and registering copyrights?
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00:14:11.200Yeah, unfortunately, for a long time, the conventional wisdom among users of the internet was that if you can right-click on it and copy it, that meant it was free to use.
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00:14:13.840Unfortunately, that's not true.
00:14:14.159 -->
00:14:26.879There are there are legitimate databases and portfolios out there where images are licensed for public use, such as on a business website, if you want to illustrate articles.
00:14:27.120 -->
00:14:29.600You need to have a license to use those images.
00:14:29.679 -->
00:14:51.440Um, so what we often see is that maybe there's an intern or somebody that's new to a company or building a website, and they'll grab some images that they think look really nice in the context of explaining the uh the background of the business or the types of products that they offer to the public, and they'll use those images without an appropriate license.
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00:14:53.440Yeah, that's tough.
00:14:53.679 -->
00:14:57.039And there, what is this thing called a reverse image search tool?
00:14:57.200 -->
00:14:59.120And how does this help the folks?
00:15:00.399 -->
00:15:02.159And you can you can play around with this if you want.
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00:15:05.440Google has the availability to search based on images.
00:15:05.600 -->
00:15:20.240You go to the the appropriate Google image search page that you can get from their main screen and you upload a JPEG or a PDF of an image and it searches the internet to find other instances where that image is used.
00:15:20.480 -->
00:15:36.639So you can imagine if you are a photographer and you take lots of photographs and you license those out, if you put them on a website and somebody has copied them, it's going to be very, very easy for you to find any instance where someone has used your photograph without permission.
00:15:36.879 -->
00:15:53.440So I think probably in the last five to ten years, we've seen a dramatic increase in the number of demand letters where image rights holders have done these reverse image searches and found what they believe to be improper use of images on websites in social media.
00:15:53.840 -->
00:15:55.440And who does the burden fall on there?
00:15:55.519 -->
00:15:59.279Is it the recipient of the letter to prove that they have the right to use it?
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00:16:06.399Unfortunately, yes, because you're faced with a claim, so you need to establish that you have the right to use that image.
00:16:06.559 -->
00:16:08.000And there's really two problems.
00:16:08.159 -->
00:16:16.720First, oftentimes, you know, 10 years may have elapsed since that image was used and nobody has records relating to that anymore.
00:16:16.879 -->
00:16:22.399Or the person that did it's no longer with the company, so it's impossible to find out where the image came from.
00:16:22.720 -->
00:16:43.600The second issue that comes up is that even if that image was properly licensed, oftentimes people forget to keep copies of the information or the proof that it was appropriately acquired from a database that has been subscribed to, for example, so that the use of that image was licensed.
00:16:44.080 -->
00:16:44.399Okay.
00:16:44.720 -->
00:16:46.960Yeah, that makes perfect sense, right?
00:16:47.120 -->
00:16:55.919You're doing something quick, you know, you're trying to get something together, and then you don't keep all the records you should keep as a business.
00:16:56.320 -->
00:16:56.639Right.
00:16:56.879 -->
00:17:20.559And the other situation that can occur, and unfortunately, I this is mostly anecdotal based on experience with dealing with these cases, but a lot of these image rights enforcement agencies will acquire images that had been previously available on some sites perhaps for free, and then they do their reverse image searches and send out demand letters.
00:17:20.640 -->
00:17:26.079And at that point, the recipient usually doesn't have evidence that the place they got it from said it was free.
00:17:26.400 -->
00:17:26.960Right.
00:17:27.200 -->
00:17:29.119And they will still pursue it anyway.
00:17:29.279 -->
00:17:39.759And in some cases, they have been legitimately acquired from databases or sources that provide the license, and the recipient just doesn't have a copy of that license anymore.
00:17:39.920 -->
00:17:47.279So you're stuck between a rock and a hard place because you did what you should have done and licensed it, you just don't have the records to prove it.
00:17:48.400 -->
00:17:54.720And that makes it difficult, and then the idea of settling becomes a little bit more important.
00:17:55.680 -->
00:17:56.480Yes, that's correct.
00:17:56.559 -->
00:18:04.960And I mentioned earlier on that typically these demand letters are looking for, you know, settlements between, say,$500 and$2,500.
00:18:05.519 -->
00:18:16.880At that point, it doesn't make a lot of sense to even get an attorney engaged, because if you were to retain me, for example, to deal with this, the cost may likely exceed the amount that the company's looking for.
00:18:17.119 -->
00:18:27.759So by keeping their keeping their demand low enough, it makes sense for companies to just pay it to make it go away if there's any kind of indication that it might be a legitimate claim.
00:18:28.319 -->
00:18:31.440That's frustrating, especially if you're a small business.
00:18:32.000 -->
00:18:34.079Very frustrating for many of our clients.
00:18:34.400 -->
00:18:34.960Yeah.
00:18:35.279 -->
00:18:44.640When you review one of these image claims, when you do get them, what what facts tend to make you suspicious that the claim may be overstated or not as strong as the letter suggests?
00:18:45.759 -->
00:18:54.960Usually we can find the image in question and be able to do some historical research and see where the image was available and how much it was available for.
00:18:55.200 -->
00:19:13.680For example, many images available from photographers that are not maybe worldwide famous will be licensable in the neighborhood of, say,$50 to$100 for commercial website use, maybe per year or even indefinitely.
00:19:13.920 -->
00:19:30.640So if you get a demand letter that's looking for$75,000 for the use of an image from someone that isn't very well known, chances are that's not anywhere near in the ballpark of either what they'll settle for or what they would be able to obtain if they were to pursue litigation for copyright infringement.
00:19:31.680 -->
00:19:41.440So are there businesses that sort of handle these letters or searches and send them out on behalf of certain creators?
00:19:42.480 -->
00:19:43.440There are indeed.
00:19:43.599 -->
00:19:49.039Typically, it's not the individual photographer or sometimes even the image rights database.
00:19:49.279 -->
00:19:59.519They will hire either outside law firms or outside right pursuit agencies that send out mass emails to as many of the infringers they can find.
00:19:59.599 -->
00:20:21.440And you can imagine that you know, even if they're able to hit on five to ten percent of those, they're gonna have a significant stream of income that they can then use to continue to either pursue existing claims against companies that haven't responded to them, or do more image right searches and find uh new defendants to chase.
00:20:21.759 -->
00:20:25.359And there's low overhead because it's just an email command going up, right?
00:20:25.599 -->
00:20:39.200Yeah, for the most part, somebody has to do the image search and then identify the user, find the appropriate person, and then target them with a form mail that may look like scam, but really does have some legitimate aspects to it.
00:20:39.759 -->
00:20:40.240All right.
00:20:40.480 -->
00:20:53.119So obviously, good record keeping might be the difference here between being able to shut down a claim or making the decision to pay one of these nuisance type payments when you get these letters.
00:20:53.359 -->
00:20:58.240What kinds of internal records should companies be keeping so they can defend themselves?
00:20:58.319 -->
00:21:01.920And even if they haven't in the past, they should start now, right?
00:21:02.880 -->
00:21:03.839Yes, that's correct.
00:21:04.000 -->
00:21:09.440And it really depends on how organized or sophisticated your marketing department is.
00:21:09.519 -->
00:21:24.799I mean, if you have an internal group that that is responsible for things like maintaining the website and selecting images, hopefully they've used um image rights vendors that have all the appropriate licenses in place and they've retained all that documentation.
00:21:25.039 -->
00:21:35.519If you've used an outside vendor to do that, you know, modern marketing companies that are up to speed on you know copyright laws should have done this.
00:21:35.680 -->
00:21:46.240Um, if you've hired your son's high school buddy that does websites and has just grabbed images, chances are uh they've used an image that he doesn't have the rights to use.
00:21:46.319 -->
00:21:58.640So you really have to look at the circumstances of who's managing it, what's their level of sophistication, and are they keeping the appropriate records in the event of a third party claim as much as you know 10 to 15 years later.
00:22:00.079 -->
00:22:03.119Like for many businesses, when they get these, they're like, but I have the rights.
00:22:03.200 -->
00:22:05.200And they don't, they don't have the records.
00:22:05.359 -->
00:22:09.200They must really be frustrated by these types of claims.
00:22:09.279 -->
00:22:17.519And they probably think recreating the record that they have the rights is easy, but it isn't always, is it?
00:22:18.000 -->
00:22:25.599Well, we've seen instances where companies will then go out and acquire the image and pay a license and try to claim that they had that license in place.
00:22:25.759 -->
00:22:26.720That's not going to work.
00:22:26.960 -->
00:22:29.759These companies, they they know what's been licensed and where.
00:22:30.000 -->
00:22:31.839They don't always investigate that.
00:22:32.000 -->
00:22:41.920So if they claim it's not licensed, you really should still check and make sure that the use of that image was not properly licensed because they don't they don't do their homework on that.
00:22:42.000 -->
00:22:43.519They expect you to do that.
00:22:43.680 -->
00:22:46.640They're not going to look and see that you're a legitimate licensee.
00:22:46.720 -->
00:22:49.279They're going to send you the letter because that's a lot easier.
00:22:49.599 -->
00:22:55.119So don't assume that an image was unlicensed is is actually true.
00:22:55.279 -->
00:23:02.240You really need to do look into it and see, because there's a good chance that that image was acquired from someplace that provided a license.
00:23:03.599 -->
00:23:08.559I see why these are called nuisance claims, because there's a lot of work on the recipient.
00:23:09.200 -->
00:23:11.039Yes, there is a lot of work.
00:23:11.279 -->
00:23:12.079They take time.
00:23:12.240 -->
00:23:14.880If it's legal time, they can be expensive.
00:23:15.039 -->
00:23:24.000Um, and then considering that usually the amount of the demands doesn't always make it worth that type of investigation, which is what we're hoping for.
00:23:24.480 -->
00:23:25.039Yes, right.
00:23:25.119 -->
00:23:29.519They're hoping you'll just like yes, here, take my$500, go away.
00:23:29.759 -->
00:23:30.079Right?
00:23:30.319 -->
00:23:35.279And so say someone did that, typically then, right, they've released all future claims.
00:23:35.440 -->
00:23:36.720Is that how that works?
00:23:36.880 -->
00:23:40.000Like they the person who sent the letter, or is that not?
00:23:40.880 -->
00:24:00.000If if a business decides to negotiate and resolve these on their own, they should make sure that there's a settlement agreement or some kind of letter that releases any and all past claims and future claims if they intend to keep on using the image, and that's part of the resolution that's reached with the enforcement agency.
00:24:00.319 -->
00:24:07.200And I I'll be the first one to admit that most of the time I will recommend our clients negotiate these on their own.
00:24:07.279 -->
00:24:22.079They're usually able to reduce the demand down upwards of 50 to 80 percent, depending on the circumstances, and resolve it for a lot less than it would have taken to have an attorney handle the negotiation resolution.
00:24:23.440 -->
00:24:32.319Yeah, but that half-hour conversation with you, they'd realize like, oh, I I need to make sure that this is the end of this, right?
00:24:32.480 -->
00:24:38.640That I can keep using it or not keep using it, that this is um gets rid of any future claims.
00:24:38.960 -->
00:24:50.319Because if you just send the money and keep using it and you don't have that release, then you have a problem going forward, potentially, when they circulate again on this image.
00:24:50.720 -->
00:25:02.960Yes, they not only could they come around again if you're continuing using the image, but the fact that you were put on notice of infringement and continued could lead to enhanced damages if it ever got to become a lawsuit.
00:25:03.279 -->
00:25:09.359So if it's a matter of not keeping the appropriate paperwork the first time around, let's make sure we do it this time around.
00:25:09.680 -->
00:25:10.880Yeah, absolutely.
00:25:11.119 -->
00:25:15.920You did mention this earlier, but I I was hoping you could elaborate on it a bit.
00:25:16.160 -->
00:25:21.440The insurance piece and informing your carriers for your commercial general liability policy.
00:25:21.519 -->
00:25:24.160Can you talk a little bit more about that and why it's important?
00:25:25.279 -->
00:25:34.880Yes, depending on the state, commercial general liability policies often have a what's called an advertising injury rider that's associated with it.
00:25:34.960 -->
00:25:36.720I think it's mandatory in New York State.
00:25:36.880 -->
00:25:43.599And they will cover claims related to copyright and trademark infringement as it relates to advertising.
00:25:43.839 -->
00:25:54.720So if you advertise your business wares through a website or on social media, and that was the genesis for the claim, there's a good chance that it could be covered by your insurance policy.
00:25:54.960 -->
00:26:07.119Now, the caveat to that is if it's a claim for$500 to$1,000, you may decide not to notify your insurance company, but you want to at least take a look at your policy and make the decision whether it's worthwhile.
00:26:07.279 -->
00:26:22.480Much like an automobile accident, if you start putting your insurance company on notice of claims, you could see your rates go up, or in the past we have even seen policies canceled when copyright infringement claims have been tendered to the insurance company.
00:26:22.640 -->
00:26:35.680So we have to consider whether it makes sense to reach out to the insurance company, but by all means look and make sure to see if there is insurance coverage in the first place, and then we can make an informed decision about how about how best to proceed.
00:26:36.079 -->
00:26:40.480I think that's just generally good advice for business on any type of action, right?
00:26:40.640 -->
00:26:51.119Like what if it's a demand letter for some type of infringement of intellectual property rights or whatever the case may be, look back at your liability policy, right?
00:26:52.000 -->
00:26:56.000Certainly don't want to miss an opportunity to have somebody else pay defense costs if possible.
00:26:56.079 -->
00:27:01.200And insurance policies may often cover things that are unexpected or that you wouldn't have thought about.
00:27:01.279 -->
00:27:14.559I think most companies are unaware of the advertising injury policy and the way it's been interpreted by the courts to cover more things than you may think of as it relates to copyright and trademark infringement, particularly in the online context.
00:27:14.960 -->
00:27:28.960I think that's really important advice because I think businesses sometimes just get all, okay, they're setting up and a lawyer told them to get all these policies, or someone told that you know they need all of these, and then it kind of sits to the side if it's a smaller business.
00:27:29.200 -->
00:27:35.200Large corporations like your Fortune 50s that the firm represents, and others, they have a team of people who take care of this, right?
00:27:35.279 -->
00:27:38.880They have in-house counsel, outside counsel working for them all the time.
00:27:39.119 -->
00:27:42.720Small businesses still have to pay attention to this as well.
00:27:43.759 -->
00:27:44.480That is correct.
00:27:44.559 -->
00:27:54.640And then, you know, for those larger companies and some of the universities that we've helped with these issues, they're deductible on their policies, may be well in excess of the claim.
00:27:54.799 -->
00:28:03.759But for smaller businesses with CGL policies, it may actually be an easy way to get the matter resolved and have the insurer take care of the claim.
00:28:04.319 -->
00:28:05.200Okay, all right.
00:28:05.359 -->
00:28:08.880So, how about maybe we should talk about some practical guidance then?
00:28:08.960 -->
00:28:17.839So if you were giving a practical playbook uh to businesses for the day a demand letter comes in, what would some of the first steps be?
00:28:18.400 -->
00:28:20.799The first step is let's figure out if it's genuine.
00:28:20.960 -->
00:28:21.200Yeah.
00:28:21.359 -->
00:28:22.640And make sure it's not a scam.
00:28:22.960 -->
00:28:31.920We're not gonna pay anything until we dig into it and see if if the claim that's being raised is legitimate, at least with regard to the what has happened, could be infringement.
00:28:32.079 -->
00:28:34.319We want to see if there is a risk of liability.
00:28:34.480 -->
00:28:42.880And then we're gonna investigate to see did we take the appropriate steps in place prior to the claim, such that there is no risk of liability.
00:28:43.039 -->
00:28:52.240That is, there is a proper license in place, it was a free use, or you have whatever required permissions for the use that's led to this claim of infringement.
00:28:53.440 -->
00:29:03.039We've talked about images and music in the copyright context, but trademarked phrases and things like that can also be part of these letters as well, can't they?
00:29:03.759 -->
00:29:04.400They can.
00:29:04.559 -->
00:29:09.440In those cases, the claimant will often be the trademark holder.
00:29:09.599 -->
00:29:17.440They don't use third-party agencies or plaintiff law firms that send out thousands and thousands of letters.
00:29:17.680 -->
00:29:27.119So, in most instances, those types of, you know, cease and desist letters as it relates to trademark usage are going to come from the owner of the trademark.
00:29:27.279 -->
00:29:34.480We can verify that very easily from USPTO public records to make sure that they are in fact the owner of that mark.
00:29:34.640 -->
00:29:55.279We can investigate any limitations to that mark, like disclaimers that might have been filed with the trademark office, and we can review the goods and services that have been registered with respect to that specific trademark to evaluate whether or not there really is a likelihood of confusion, which is kind of the crux of whether or not there's trademark infringement.
00:29:55.839 -->
00:30:08.160And that's because there's USPTO searches and other things involved, maybe in those instances, and it's direct from the holder of the mark, probably calling your lawyer is a good first step.
00:30:09.200 -->
00:30:09.519Yes.
00:30:09.680 -->
00:30:31.279And you know, off the top of my head, I I can't think of any correspondence or emails or claims that have come in on trademark cases where there wasn't some level of credibility to it, unlike we might see with a patent troll or with some of these image rights companies that send out letters that may or may not be appropriate given uh the source of the image.
00:30:31.680 -->
00:30:33.680And you mentioned cease and desist letter.
00:30:33.759 -->
00:30:36.240I guess maybe our listeners don't quite know what that means.
00:30:36.400 -->
00:30:39.519Can you just tell us a little bit about what a cease and desist letter is?
00:30:40.000 -->
00:30:40.240Sure.
00:30:40.319 -->
00:30:48.880Typically a cease and desist letter is just a nasty letter you get from an attorney or someone claiming to be attorney that says, stop doing this or we're gonna see you for infringement.
00:30:49.119 -->
00:30:49.759Yep.
00:30:50.480 -->
00:30:58.559Um, and so I guess we should talk about, you know, I mentioned that I was frustrated and a bit angry when I received one of those.
00:30:58.720 -->
00:31:01.680But what should you should what should never be said?
00:31:01.839 -->
00:31:07.680Or what are some what's some advice for the early uh response to one of these if you're doing it on your own?
00:31:08.880 -->
00:31:12.400The the best response at first is no response.
00:31:12.559 -->
00:31:25.200Um we don't want to give the claimant any basis to believe that you think that you're at fault in this circumstance, much like when you get pulled over for driving a little too fast.
00:31:25.359 -->
00:31:28.559You don't want to tell the police officer how fast you were going.
00:31:28.799 -->
00:31:32.640We don't want to we don't want to admit liability right out of the gate.
00:31:32.799 -->
00:31:36.720We want to get this in the hands of someone that can investigate it and come up with the other.
00:31:36.960 -->
00:31:38.640No statements against interest, people.
00:31:38.720 -->
00:31:40.000Those statements against interest.
00:31:40.480 -->
00:31:42.480Keep your keep your mouth shut.
00:31:42.960 -->
00:31:45.200Just say yes, sir, no, sir, thank you.
00:31:45.759 -->
00:31:54.240So in this case, you know, if if if it's dean, you know, we're gonna investigate, we're gonna see if it's legitimate, and then if it is, come up with a strategy for responding.
00:31:54.400 -->
00:31:56.640I I like it when clients reach out with these.
00:31:56.720 -->
00:32:04.559Uh what I usually tell them is look, let me just look at it, make sure it's legitimate, and then if it makes sense, go negotiate it and deal with it on your own.
00:32:04.640 -->
00:32:06.640You don't have to engage outside counsel.
00:32:06.880 -->
00:32:15.599If it's if the claim is much more significant, then we've, you know, you may want to have counsel trying to negotiate and look into it in more depth.
00:32:16.319 -->
00:32:25.359Yeah, that makes sense to see because if it is a higher number, if there is a potential that they have a little bit more backing it up, a little evidence on their side.
00:32:25.680 -->
00:32:26.640Yes, that's correct.
00:32:26.720 -->
00:32:38.720Now I, you know, over the last maybe two years, if I've seen 50 of these, perhaps, um, I'm not aware of any of them that have led to an actual litigation.
00:32:38.880 -->
00:32:53.759So one thing to keep in mind are you know, is this law firm in California that's representing an image right collection agency that bought all these images from a photographer 10 years ago and registered to win the copyright office?
00:32:53.839 -->
00:32:59.920Are they gonna file a federal lawsuit over what's maybe$2,000 in damages?
00:33:00.160 -->
00:33:02.160If I were advising them, I would say no.
00:33:02.400 -->
00:33:10.720So, you know, keep that in mind that you do have some leverage to negotiate these if in fact there was liability and you don't have an appropriate license for the license.
00:33:11.519 -->
00:33:12.480Yeah, that makes sense.
00:33:12.640 -->
00:33:22.079That$2,000 would be eaten up by court fees, file like filing fees and the first review by a lawyer, I think, um on their side.
00:33:22.400 -->
00:33:32.000Yeah, and there's definitely a risk in ignoring letters like this that they could file a lawsuit or that you could be on the hook for attorney's fees or enhanced damages.
00:33:32.160 -->
00:33:51.119So we have to we really have to take a look at you know, what's the potential liability and how strongly are we going to negotiate if it's if it's modest amounts in that$500 to$1,000 range, it may make sense to just resolve it without engaging counsel and doubling or tripling the costs associated with dealing with the claim.
00:33:51.279 -->
00:33:55.839But if it's more significant, then you know it may make sense to have counsel involved.
00:33:56.240 -->
00:33:57.519That makes perfect sense.
00:33:57.759 -->
00:33:58.640Makes perfect sense.
00:33:58.799 -->
00:34:06.400So, what would you say, you know, what can businesses do now before a letter arrives to sort of put themselves in a stronger position?
00:34:06.799 -->
00:34:13.280I think the the best takeaway from the podcast should be document everything you do.
00:34:13.599 -->
00:34:13.920Right?
00:34:14.239 -->
00:34:30.320But first and foremost, make sure the people that are making decisions about what images get used, what music gets played, what movies are made available in common areas, make sure they understand the copyright laws and make sure that they have the appropriate licenses in place.
00:34:30.400 -->
00:34:45.760And then by all means, create records of those licenses to make sure that if a claim is ever received, and it could be five years later, it could be 10 years later, that we have the appropriate records to go right back to them and say, nope, this was properly licensed, leave us alone.
00:34:46.480 -->
00:34:47.519Right, very good.
00:34:48.000 -->
00:34:52.000Well, Dave, thank you so much for joining us today and for your insights.
00:34:52.079 -->
00:34:57.840Um, as producer Kate said, you're already invited back, even before we started, because you did so much prep to get ready for this.
00:34:57.920 -->
00:34:58.960So thank you very much.
00:34:59.199 -->
00:35:04.400I will just tell everyone that not every guest provides me with some points in advance.
00:35:04.559 -->
00:35:06.400I usually have to go do my legal research.
00:35:06.559 -->
00:35:11.199So as he always has been, Dave is an A plus student on this as well.
00:35:12.079 -->
00:35:13.119So thanks so much.
00:35:13.760 -->
00:35:15.440Yeah, it's been great to talk to you.
00:35:15.599 -->
00:35:18.719I should say that Dave and I sit on the same floor and I chat with him often.
00:35:18.800 -->
00:35:23.119So it was nice to be able to talk to him about this aspect of his work.
00:35:23.440 -->
00:35:31.280So, you know, everyone should remember that intellectual property rights are critical to businesses and companies need to respond thoughtfully.
00:35:31.519 -->
00:35:40.159Sometimes it's full attorney guidance, and sometimes, like Dave said, it's just a quick review, and you're told, like maybe this one you can handle and negotiate on your own.
00:35:40.320 -->
00:35:42.880But you have to protect and preserve those rights.
00:35:43.119 -->
00:35:45.760So I really do hope you'll join us again, Dave.
00:35:45.840 -->
00:35:50.400Maybe there'll be some cool decision or other aspect, and you'll come back and talk to us.
00:35:50.960 -->
00:35:52.000Be my pleasure, Kim.
00:35:52.079 -->
00:35:52.480Thank you.
00:35:52.719 -->
00:35:53.039All right.
00:35:53.199 -->
00:35:54.320Thanks so much.
00:35:58.800 -->
00:36:01.280Thank you for tuning into this episode of Legally Bond.
00:36:01.360 -->
00:36:09.760If you're listening and have any questions for me, want to hear from someone at the firm, or have a suggestion for a future topic, please email us at legallybond at BSK.com.
00:36:09.920 -->
00:36:14.159Also don't forget to rate, review, and subscribe to Legally Bond wherever podcasts are downloaded.
00:36:14.320 -->
00:36:16.559Until our next talk, be welcome.
00:36:20.639 -->
00:36:25.920Bond, Shenick, and King has prepared this communication to present only general information.
00:36:26.159 -->
00:36:30.320This is not intended as legal advice, nor should you consider it as such.
00:36:30.559 -->
00:36:34.480You should not act or decline to act based upon the context.
00:36:34.719 -->
00:36:40.239While we try to make sure that the information is complete and accurate, laws can change quickly.
00:36:40.480 -->
00:36:46.719You should always formally engage a lawyer of your choosing before taking actions which have legal consequences.
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