Full Transcript for An Interview with David Nocilly, Intellectual Property

followed along. 00:02:18.879 --> 00:02:20.560 And we could say that's George, right? 00:02:20.719 --> 00:02:22.159 We could say it's George McGuire. 00:02:22.400 --> 00:02:23.039 Yes. 00:02:23.840 --> 00:02:24.800 That's terrific. 00:02:24.960 --> 00:02:25.919 Okay, very good. 00:02:26.080 --> 00:02:33.439 So would you mind also sharing a bit about the kind the types of clients you and the IP team at Bond might advise? 00:02:34.240 --> 00:02:52.240 Our 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. 00:02:52.639 --> 00:02:57.280 Yeah, it's wild the size of the practice and the and the variety that you all really have. 00:02:57.360 --> 00:03:04.560 And you cover everything from patent prosecution to litigation, trademark, copyright, all areas of intellectual property law. 00:03:04.639 --> 00:03:05.360 Is that right? 00:03:05.680 --> 00:03:06.479 Yeah, that's correct. 00:03:06.560 --> 00:03:12.639 I mean, practicing in upstate New York, um, generally patent attorneys will handle uh trademark filings. 00:03:12.719 --> 00:03:18.639 Um, we don't usually have trademark specialists in law firms and smaller to mid-sized regional law firms. 00:03:18.800 --> 00:03:19.759 So we handle that. 00:03:19.840 --> 00:03:36.560 And 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. 00:03:36.960 --> 00:03:47.680 And 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. 00:03:48.319 --> 00:04:01.520 And 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. 00:04:01.680 --> 00:04:05.039 And so it was really made me angry too. 00:04:05.120 --> 00:04:08.879 Uh so for those of you who are listening who may have received these, this is real. 00:04:09.039 --> 00:04:13.520 I understand the reaction that you might have to what we're talking about today. 00:04:14.639 --> 00:04:24.399 I 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. 00:04:24.639 --> 00:04:31.279 That certainly is scary and oftentimes maybe unwarranted, but nonetheless received all the time. 00:04:31.680 --> 00:04:32.079 Exactly. 00:04:32.240 --> 00:04:37.279 And of course, my first reaction was to tell my boss and then call a letter. 00:04:37.519 --> 00:04:39.519 But anyway, uh at bond, of course. 00:04:40.000 --> 00:04:45.040 So for many businesses, the first reaction to a demand letter may be panic and concern. 00:04:45.199 --> 00:04:48.000 And in my case, of course, I mentioned it was anger. 00:04:48.319 --> 00:04:57.040 So, 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? 00:04:57.120 --> 00:04:59.759 You're being told you violated federal law in some way. 00:05:00.079 --> 00:05:02.399 That's what this person is sort of accusing you of. 00:05:02.560 --> 00:05:07.360 What's the first thing the company should do before reacting substantially? 00:05:08.560 --> 00:05:16.480 Well, 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. 00:05:16.639 --> 00:05:18.000 So we'd love to get those calls. 00:05:18.079 --> 00:05:20.639 But no, really, the first step you should do is investigate. 00:05:20.879 --> 00:05:27.920 You don't know when you receive that letter whether it's spam, whether it's a scam, or whether there's a legitimate claim. 00:05:28.079 --> 00:05:36.319 So 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. 00:05:36.560 --> 00:05:39.279 And then yeah, so how would they do that? 00:05:39.360 --> 00:05:40.240 What would you recommend? 00:05:40.319 --> 00:05:46.160 How do they distinguish between something that needs to be taken very seriously and maybe something that needs a more skeptical look? 00:05:46.399 --> 00:05:50.480 Um, that's very hard right now because we do see so many scams. 00:05:50.560 --> 00:05:55.519 Um, things like trademarks or uh addresses are now in public databases. 00:05:55.680 --> 00:06:02.560 So it's very easy for anyone to send something that looks like official government correspondence or official notices when they are. 00:06:02.800 --> 00:06:09.279 So we really have to take a look at what are they asserting in the context of copyright infringement, if it's image use. 00:06:09.519 --> 00:06:14.399 Is that image actually used on your website or wherever they claim it's been used? 00:06:14.560 --> 00:06:21.120 Um, if you can find that image, chances are the claim might be more legitimate than just a scam letter. 00:06:21.519 --> 00:06:22.399 That's interesting. 00:06:22.560 --> 00:06:31.120 So 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. 00:06:31.839 --> 00:06:36.160 Yeah, usually those demand letters are not seeking significant funds. 00:06:36.240 --> 00:06:41.439 And I say when I say significant, it's usually in the neighborhood of maybe$500 to$2,500. 00:06:42.000 --> 00:06:53.839 So 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. 00:06:54.000 --> 00:07:01.680 So 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. 00:07:02.000 --> 00:07:02.319 Right. 00:07:02.399 --> 00:07:06.879 So what are some of the other, I mean, that seems like it would be a mistake to react that way, right? 00:07:07.040 --> 00:07:08.319 You should do your research first. 00:07:08.480 --> 00:07:15.920 Are there other mistakes or should I say missteps that organizations might make in the first few days after receiving one of these letters? 00:07:16.399 --> 00:07:44.480 I 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. 00:07:44.879 --> 00:07:45.680 Right, right. 00:07:45.920 --> 00:07:50.160 That is absolutely when you're in-house an important first step. 00:07:50.959 --> 00:07:52.160 So, all right, let's move. 00:07:52.319 --> 00:07:56.160 Do you mind if we move on to copyright infringement and talk a little bit about that? 00:07:56.800 --> 00:07:57.360 Absolutely. 00:07:57.600 --> 00:08:03.360 All right, so copyright claims that tend to be more legitimate, particularly maybe music rights claims. 00:08:03.519 --> 00:08:10.639 When a business uses music in a live setting, what should it understand about public performance rights and the need for a license? 00:08:11.040 --> 00:08:26.480 I 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. 00:08:26.639 --> 00:08:29.600 So if you do so without a license, it can constitute copyright. 00:08:31.120 --> 00:08:32.559 Yeah, that's that's wild. 00:08:32.720 --> 00:08:42.320 So 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? 00:08:42.480 --> 00:08:44.480 It seems like this is really complicated music. 00:08:44.639 --> 00:08:46.639 Do you want to kind of take us through this a little bit? 00:08:47.039 --> 00:08:47.279 Sure. 00:08:47.360 --> 00:08:48.720 Well, just back up a second. 00:08:48.799 --> 00:08:51.440 I mean, there could be it could be movies, it could be music. 00:08:52.240 --> 00:08:57.519 We've seen claims for nursing homes that in common areas play music or play movies. 00:08:57.600 --> 00:09:03.679 So 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 --> 00:09:13.200 And 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. 00:09:13.360 --> 00:09:22.320 So 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. 00:09:22.399 --> 00:09:33.679 Um, and in this case, you know, public performances of music are governed by um licenses from three to four different main or major agencies. 00:09:33.840 --> 00:09:38.720 And actually, there's a couple smaller ones, and they each have different libraries of music. 00:09:38.879 --> 00:09:47.360 And in some cases, the same song by different performers, that particular sound recording might be managed by different agencies. 00:09:47.600 --> 00:09:50.879 The most common are BMI and ASCAP, if you've heard of those. 00:09:51.279 --> 00:09:57.600 They're the kind of the premier licensing agencies, but there are a few others that have um surfaced recently. 00:09:58.159 --> 00:10:10.399 Well, 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? 00:10:11.200 --> 00:10:16.480 There are some exceptions for educational use, particularly if it's face-to-face teaching. 00:10:16.639 --> 00:10:23.840 But 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. 00:10:24.799 --> 00:10:25.120 Wow. 00:10:26.159 --> 00:10:27.840 So also we have social media, right? 00:10:27.919 --> 00:10:32.559 And you get the option sometimes when you post to pick a song that goes with it. 00:10:32.720 --> 00:10:39.600 So, how is online or social media use of music different from live performance use from a licensing perspective? 00:10:39.919 --> 00:10:47.120 Yeah, unfortunately, streaming rights are controlled by completely different entities than the ones that control performance rights. 00:10:47.200 --> 00:10:56.240 So 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. 00:10:56.399 --> 00:11:03.279 That'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 --> 00:11:12.559 Now 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 --> 00:11:20.639 But 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. 00:11:21.360 --> 00:11:22.080 That's wild. 00:11:22.240 --> 00:11:31.679 So it's it's really broad, and there are a lot of different things that people may do fairly commonly are included here. 00:11:32.159 --> 00:11:36.159 Yeah, it's it really is

all-encompassing, and we touch it in very different ways. 00:11:36.240 --> 00:11:44.480 And 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 --> 00:11:49.919 So if a client does receive a music rights demand, what are you looking for? 00:11:50.080 --> 00:11:53.440 What do you want to see first if they come to you as their attorney? 00:11:53.759 --> 00:11:56.639 The first thing we look at is what were the circumstances of the use? 00:11:56.799 --> 00:11:58.080 Was it a public performance? 00:11:58.240 --> 00:11:59.120 Was it private? 00:11:59.360 --> 00:12:07.360 If 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 --> 00:12:12.639 You know, the the classic, you know, elevator music or musac, you know, you can you can license that. 00:12:13.360 --> 00:12:15.840 There are licenses that are out there, and many people have them. 00:12:15.919 --> 00:12:20.639 If you're a bar or restaurant, hopefully you know that you need to have your ASCAP and BMI licenses. 00:12:20.720 --> 00:12:31.200 And 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 --> 00:12:39.360 What we see these days with social media is that you know, attendees of events often record them and place them online. 00:12:39.759 --> 00:12:39.919 Yes. 00:12:40.159 --> 00:12:53.519 And 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 --> 00:12:56.879 So it's it's very, very easy to find infringement these days. 00:12:56.960 --> 00:13:05.679 So 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. 00:13:06.080 --> 00:13:06.639 That's right. 00:13:06.799 --> 00:13:07.600 Wow, that's wild. 00:13:07.759 --> 00:13:19.360 I 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 --> 00:13:20.879 That's pretty wild. 00:13:21.200 --> 00:13:23.759 See, I learned something about IP today. 00:13:24.399 --> 00:13:25.120 Um, all right. 00:13:25.200 --> 00:13:27.039 So the other thing is images, right? 00:13:27.120 --> 00:13:36.720 And 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 --> 00:13:43.840 But copyright claims and images, can you explain how some image rights enforcement companies might operate? 00:13:44.080 --> 00:13:47.200

I think people often think, oh, I this is a lovely photo. 00:13:47.360 --> 00:13:49.919 I can use it for whatever they want to use it for. 00:13:50.080 --> 00:13:54.720 An invitation to an event on their own website if they have a small business. 00:13:55.279 --> 00:14:02.000 So what are the what's the practice of acquiring image portfolios and registering copyrights? 00:14:02.480 --> 00:14:11.200 Yeah, 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. 00:14:11.759 --> 00:14:13.840 Unfortunately, that's not true. 00:14:14.159 --> 00:14:26.879 There 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 --> 00:14:29.600 You need to have a license to use those images. 00:14:29.679 --> 00:14:51.440 Um, 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. 00:14:52.240 --> 00:14:53.440 Yeah, that's tough. 00:14:53.679 --> 00:14:57.039 And there, what is this thing called a reverse image search tool? 00:14:57.200 --> 00:14:59.120 And how does this help the folks? 00:15:00.399 --> 00:15:02.159 And you can you can play around with this if you want. 00:15:02.320 --> 00:15:05.440 Google has the availability to search based on images. 00:15:05.600 --> 00:15:20.240 You 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 --> 00:15:36.639 So 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 --> 00:15:53.440 So 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 --> 00:15:55.440 And who does the burden fall on there? 00:15:55.519 --> 00:15:59.279 Is it the recipient of the letter to prove that they have the right to use it? 00:15:59.600 --> 00:16:06.399 Unfortunately, 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 --> 00:16:08.000 And there's really two problems. 00:16:08.159 --> 00:16:16.720 First, 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 --> 00:16:22.399 Or 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 --> 00:16:43.600 The 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 --> 00:16:44.399 Okay. 00:16:44.720 --> 00:16:46.960 Yeah, that makes perfect sense, right? 00:16:47.120 --> 00:16:55.919 You'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 --> 00:16:56.639 Right. 00:16:56.879 --> 00:17:20.559 And 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 --> 00:17:26.079 And 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 --> 00:17:26.960 Right. 00:17:27.200 --> 00:17:29.119 And they will still pursue it anyway. 00:17:29.279 --> 00:17:39.759 And 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 --> 00:17:47.279 So 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 --> 00:17:54.720 And that makes it difficult, and then the idea of settling becomes a little bit more important. 00:17:55.680 --> 00:17:56.480 Yes, that's correct. 00:17:56.559 --> 00:18:04.960 And 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 --> 00:18:16.880 At 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 --> 00:18:27.759 So 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 --> 00:18:31.440 That's frustrating, especially if you're a small business. 00:18:32.000 --> 00:18:34.079 Very frustrating for many of our clients. 00:18:34.400 --> 00:18:34.960 Yeah. 00:18:35.279 --> 00:18:44.640 When 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 --> 00:18:54.960 Usually 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 --> 00:19:13.680 For 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 --> 00:19:30.640 So 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 --> 00:19:41.440 So are there businesses that sort of handle these letters or searches and send them out on behalf of certain creators? 00:19:42.480 --> 00:19:43.440 There are indeed. 00:19:43.599 --> 00:19:49.039 Typically, it's not the individual photographer or sometimes even the image rights database. 00:19:49.279 --> 00:19:59.519 They 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 --> 00:20:21.440 And 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 --> 00:20:25.359 And there's low overhead because it's just an email command going up, right? 00:20:25.599 --> 00:20:39.200 Yeah, 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 --> 00:20:40.240 All right. 00:20:40.480 --> 00:20:53.119 So 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 --> 00:20:58.240 What kinds of internal records should companies be keeping so they can defend themselves? 00:20:58.319 --> 00:21:01.920 And even if they haven't in the past, they should start now, right? 00:21:02.880 --> 00:21:03.839 Yes, that's correct. 00:21:04.000 --> 00:21:09.440 And it really depends on how organized or sophisticated your marketing department is. 00:21:09.519 --> 00:21:24.799 I 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 --> 00:21:35.519 If 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 --> 00:21:46.240 Um, 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 --> 00:21:58.640 So 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 --> 00:22:03.119 Like for many businesses, when they get these, they're like, but I have the rights. 00:22:03.200 --> 00:22:05.200 And they don't, they don't have the records. 00:22:05.359 --> 00:22:09.200 They must really be frustrated by these types of claims. 00:22:09.279 --> 00:22:17.519 And they probably think recreating the record that they have the rights is easy, but it isn't always, is it? 00:22:18.000 --> 00:22:25.599 Well, 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 --> 00:22:26.720 That's not going to work. 00:22:26.960 --> 00:22:29.759 These companies, they they know what's been licensed and where. 00:22:30.000 --> 00:22:31.839 They don't always investigate that. 00:22:32.000 --> 00:22:41.920 So 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 --> 00:22:43.519 They expect you to do that. 00:22:43.680 --> 00:22:46.640 They're not going to look and see that you're a legitimate licensee. 00:22:46.720 --> 00:22:49.279 They're going to send you the letter because that's a lot easier. 00:22:49.599 --> 00:22:55.119 So don't assume that an image was unlicensed is is actually true. 00:22:55.279 --> 00:23:02.240 You 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 --> 00:23:08.559 I see why these are called nuisance claims, because there's a lot of work on the recipient. 00:23:09.200 --> 00:23:11.039 Yes, there is a lot of work. 00:23:11.279 --> 00:23:12.079 They take time. 00:23:12.240 --> 00:23:14.880 If it's legal time, they can be expensive. 00:23:15.039 --> 00:23:24.000 Um, 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 --> 00:23:25.039 Yes, right. 00:23:25.119 --> 00:23:29.519 They're hoping you'll just like yes, here, take my$500, go away. 00:23:29.759 --> 00:23:30.079 Right? 00:23:30.319 --> 00:23:35.279 And so say someone did that, typically then,

right, they've released all future claims. 00:23:35.440 --> 00:23:36.720 Is that how that works? 00:23:36.880 --> 00:23:40.000 Like they the person who sent the letter, or is that not? 00:23:40.880 --> 00:24:00.000 If 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 --> 00:24:07.200 And 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 --> 00:24:22.079 They'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 --> 00:24:32.319 Yeah, 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 --> 00:24:38.640 That I can keep using it or not keep using it, that this is um gets rid of any future claims. 00:24:38.960 --> 00:24:50.319 Because 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 --> 00:25:02.960 Yes, 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 --> 00:25:09.359 So 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 --> 00:25:10.880 Yeah, absolutely. 00:25:11.119 --> 00:25:15.920 You did mention this earlier, but I I was hoping you could elaborate on it a bit. 00:25:16.160 --> 00:25:21.440 The insurance piece and informing your carriers for your commercial general liability policy. 00:25:21.519 --> 00:25:24.160 Can you talk a little bit more about that and why it's important? 00:25:25.279 --> 00:25:34.880 Yes, 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 --> 00:25:36.720 I think it's mandatory in New York State. 00:25:36.880 --> 00:25:43.599 And they will cover claims related to copyright and trademark infringement as it relates to advertising. 00:25:43.839 --> 00:25:54.720 So 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 --> 00:26:07.119 Now, 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 --> 00:26:22.480 Much 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 --> 00:26:35.680 So 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 --> 00:26:40.480 I think that's just generally good advice for business on any type of action, right? 00:26:40.640 --> 00:26:51.119 Like 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 --> 00:26:56.000 Certainly don't want to miss an opportunity to have somebody else pay defense costs if possible. 00:26:56.079 --> 00:27:01.200 And insurance policies may often cover things that are unexpected or that you wouldn't have thought about. 00:27:01.279 --> 00:27:14.559 I 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 --> 00:27:28.960 I 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 --> 00:27:35.200 Large 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 --> 00:27:38.880 They have in-house counsel, outside counsel working for them all the time. 00:27:39.119 --> 00:27:42.720 Small businesses still have to pay attention to this as well. 00:27:43.759 --> 00:27:44.480 That is correct. 00:27:44.559 --> 00:27:54.640 And 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 --> 00:28:03.759 But 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 --> 00:28:05.200 Okay, all right. 00:28:05.359 --> 00:28:08.880 So, how about maybe we should talk about some practical guidance then? 00:28:08.960 --> 00:28:17.839 So 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 --> 00:28:20.799 The first step is let's

figure out if it's genuine. 00:28:20.960 --> 00:28:21.200 Yeah. 00:28:21.359 --> 00:28:22.640 And make sure it's not a scam. 00:28:22.960 --> 00:28:31.920 We'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 --> 00:28:34.319 We want to see if there is a risk of liability. 00:28:34.480 --> 00:28:42.880 And 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 --> 00:28:52.240 That 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 --> 00:29:03.039 We'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 --> 00:29:04.400 They can. 00:29:04.559 --> 00:29:09.440 In those cases, the claimant will often be the trademark holder. 00:29:09.599 --> 00:29:17.440 They don't use third-party agencies or plaintiff law firms that send out thousands and thousands of letters. 00:29:17.680 --> 00:29:27.119 So, 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 --> 00:29:34.480 We 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 --> 00:29:55.279 We 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 --> 00:30:08.160 And 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 --> 00:30:09.519 Yes. 00:30:09.680 --> 00:30:31.279 And 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 --> 00:30:33.680 And you mentioned cease and desist letter. 00:30:33.759 --> 00:30:36.240 I guess maybe our listeners don't quite know what that means. 00:30:36.400 --> 00:30:39.519 Can you just tell us a little bit about what a cease and desist letter is? 00:30:40.000 --> 00:30:40.240 Sure. 00:30:40.319 --> 00:30:48.880 Typically 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 --> 00:30:49.759 Yep. 00:30:50.480 --> 00:30:58.559 Um, 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 --> 00:31:01.680 But what should you should what should never be said? 00:31:01.839 --> 00:31:07.680 Or 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 --> 00:31:12.400 The the best response at first is no response. 00:31:12.559 --> 00:31:25.200 Um 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 --> 00:31:28.559 You don't want to tell the police officer how fast you were going. 00:31:28.799 --> 00:31:32.640 We don't want to we don't want to admit liability right out of the gate. 00:31:32.799 --> 00:31:36.720 We want to get this in the hands of someone that can investigate it and come up with the other. 00:31:36.960 --> 00:31:38.640 No statements against interest, people. 00:31:38.720 --> 00:31:40.000 Those statements against interest. 00:31:40.480 --> 00:31:42.480 Keep your keep your mouth shut. 00:31:42.960 --> 00:31:45.200 Just say yes, sir, no, sir, thank you. 00:31:45.759 --> 00:31:54.240 So 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 --> 00:31:56.640 I I like it when clients reach out with these. 00:31:56.720 --> 00:32:04.559 Uh 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 --> 00:32:06.640 You don't have to engage outside counsel. 00:32:06.880 --> 00:32:15.599 If 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 --> 00:32:25.359 Yeah, 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 --> 00:32:26.640 Yes, that's correct. 00:32:26.720 --> 00:32:38.720 Now 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 --> 00:32:53.759 So 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 --> 00:32:59.920 Are they gonna file a federal lawsuit over what's maybe$2,000 in damages? 00:33:00.160 --> 00:33:02.160 If I were advising them, I would say no. 00:33:02.400 --> 00:33:10.720 So, 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 --> 00:33:12.480 Yeah, that makes sense. 00:33:12.640 --> 00:33:22.079 That$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 --> 00:33:32.000 Yeah, 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 --> 00:33:51.119 So 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 --> 00:33:55.839 But if it's more significant, then you know it may make sense to have counsel involved. 00:33:56.240 --> 00:33:57.519 That makes perfect sense. 00:33:57.759 --> 00:33:58.640 Makes perfect sense. 00:33:58.799 --> 00:34:06.400 So, 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 --> 00:34:13.280 I think the the best takeaway from the podcast should be document everything you do. 00:34:13.599 --> 00:34:13.920 Right? 00:34:14.239 --> 00:34:30.320 But 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 --> 00:34:45.760 And 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 --> 00:34:47.519 Right, very good. 00:34:48.000 --> 00:34:52.000 Well, Dave, thank you so much for joining us today and for your insights. 00:34:52.079 --> 00:34:57.840 Um, 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 --> 00:34:58.960 So thank you very much. 00:34:59.199 --> 00:35:04.400 I will just tell everyone that not every guest provides me with some points in advance. 00:35:04.559 --> 00:35:06.400 I usually have to go do my legal research. 00:35:06.559 --> 00:35:11.199 So as he always has been, Dave is an A plus student on this as well. 00:35:12.079 --> 00:35:13.119 So thanks so much. 00:35:13.760 --> 00:35:15.440 Yeah, it's been great to talk to you. 00:35:15.599 --> 00:35:18.719 I should say that Dave and I sit on the same floor and I chat with him often. 00:35:18.800 --> 00:35:23.119 So it was nice to be able to talk to him about this aspect of his work. 00:35:23.440 --> 00:35:31.280 So, you know, everyone should remember that intellectual property rights are critical to businesses and companies need to respond thoughtfully. 00:35:31.519 --> 00:35:40.159 Sometimes 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 --> 00:35:42.880 But you have to protect and preserve those rights. 00:35:43.119 --> 00:35:45.760 So I really do hope you'll join us again, Dave. 00:35:45.840 --> 00:35:50.400 Maybe there'll be some cool decision or other aspect, and you'll come back and talk to us. 00:35:50.960 --> 00:35:52.000 Be my pleasure, Kim. 00:35:52.079 --> 00:35:52.480 Thank you. 00:35:52.719 --> 00:35:53.039 All right. 00:35:53.199 --> 00:35:54.320 Thanks so much. 00:35:58.800 --> 00:36:01.280 Thank you for tuning into this episode of Legally Bond. 00:36:01.360 --> 00:36:09.760 If 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 --> 00:36:14.159 Also don't forget to rate, review, and subscribe to Legally Bond wherever podcasts are downloaded. 00:36:14.320 --> 00:36:16.559 Until our next talk, be welcome. 00:36:20.639 --> 00:36:25.920 Bond, Shenick, and King has prepared this communication to present only general information. 00:36:26.159 --> 00:36:30.320 This is not intended as legal advice, nor should you consider it as such. 00:36:30.559 --> 00:36:34.480 You should not act or decline to act based upon the context. 00:36:34.719 --> 00:36:40.239 While we try to make sure that the information is complete and accurate, laws can change quickly. 00:36:40.480 --> 00:36:46.719 You should always formally engage a lawyer of your choosing before taking actions which have legal consequences. 00:36:46.960 --> 00:36:56.000 For information about our communication, firm, practice areas, and attorneys, visit our website, bsk.com. 00:36:56.400 --> 00:36:58.239 This is attorney advertising.