Received extortion letter from Masterfile... Have some questions

[sunset]

This is an excellent forum and I have found a lot of great advice. I have spent a lot of time reading and doing research on here. I am hoping someone can clear up some of my confusion on these extortion letters.

My client and I reside in the U.S. and as you know Masterfile is in Canada. My client received a Federal Express letter showing an image in question and demanding a sum of over $2K. We immediately removed the image in question (only one image) that was used in an ad on their website. This is a very small business and as we have seen they tend to target them.

We purchase stock images to create designs and sometimes when we receive a blog on LinkedIn with "free" graphics, vectors, etc. we will use them on occasion. This is one time we shouldn't have. The image that we got that was supposedly a free to use royalty-free image matches an image on Masterfile's site. The blog is no longer around. If you look at the two images you can see they are very similar in nature and that although not exactly the same image...the person who posted the image could have posted a new variation of it or changed the image themselves. It is not 100% the same though.

Here are my questions:

1.  We sent an email to MF informing them that we were taking responsibility for this issue and that they were to leave our client alone.
2.  MF immediately reduced the damages owed from about $2000 to $1300 which is still nuts. At no time have we discussed the image with them or asked them to reduce the amount. It's what they sent back immediately. This is a common image that can be bought on the other stock photography sites for around $19-40 depending where you look. Nothing special about it at all.
3.  We looked up the copyright notice they sent and it is a compilation of works filed under Masterfile with a typewritten list of over 30 photographers. They claim it is an exclusive photo to them but we did find it on one other site under the same photographer.
4. The copyright form MF sent us isn't filled out correctly and just has a list of all the photographers and it is for a CD comp of all works. The title of the work for this image isn't on this copyright form. In fact none of the titles of work are on the form. We did find other copyright forms with this photographer's name but none of these matched the copyright number we were given.
5.  We read about the lawsuit where they dropped the charges (I believe it was called Chenga?) because MF had used the compilation method. So are we in violation if this is the same method they used? Is this even a valid copyright form?

If anyone could share any info with us or their experiences, we would appreciate it. We get that they don't care if we removed the image immediately or that we didn't use it on purpose and acquired it from a bad source. We don't make any money helping out this client and we do it to be nice. The economy here isn't that great and we help out with a few ads here and there so we wouldn't be paying that type of money for such a common image for a client that basically has no money to begin with for advertising.

We don't mind paying a reasonable amount but it looks like what we feel is reasonable and what they feel is reasonable is going to be the sticky part.

Thanks!
 

[Robert Krausankas (BuddhaPi)]

see my comments inline...

This is an excellent forum and I have found a lot of great advice. I have spent a lot of time reading and doing research on here. I am hoping someone can clear up some of my confusion on these extortion letters.

My client and I reside in the U.S. and as you know Masterfile is in Canada. My client received a Federal Express letter showing an image in question and demanding a sum of over $2K. We immediately removed the image in question (only one image) that was used in an ad on their website. This is a very small business and as we have seen they tend to target them.

We purchase stock images to create designs and sometimes when we receive a blog on LinkedIn with "free" graphics, vectors, etc. we will use them on occasion. This is one time we shouldn't have. The image that we got that was supposedly a free to use royalty-free image matches an image on Masterfile's site. The blog is no longer around. If you look at the two images you can see they are very similar in nature and that although not exactly the same image...the person who posted the image could have posted a new variation of it or changed the image themselves. It is not 100% the same though.

Royalty Free does not equal FREE

Here are my questions:

1.  We sent an email to MF informing them that we were taking responsibility for this issue and that they were to leave our client alone. Good luck with this, ultimately it is your clients site, they will most likely cut you out of the equation, and continue to harass your client, or maybe both of you, since you admitted using the image.
2.  MF immediately reduced the damages owed from about $2000 to $1300 which is still nuts. At no time have we discussed the image with them or asked them to reduce the amount. It's what they sent back immediately. This is a common image that can be bought on the other stock photography sites for around $19-40 depending where you look. Nothing special about it at all. except that it is a rights managed image in their collection, hence the higher price tag.
3.  We looked up the copyright notice they sent and it is a compilation of works filed under Masterfile with a typewritten list of over 30 photographers. They claim it is an exclusive photo to them but we did find it on one other site under the same photographer. which means the image could have been purchased from the artist himself, unless you admitted to them that you got the image from a blog, then that defense is worthless for the most part.
4. The copyright form MF sent us isn't filled out correctly and just has a list of all the photographers and it is for a CD comp of all works. The title of the work for this image isn't on this copyright form. In fact none of the titles of work are on the form. We did find other copyright forms with this photographer's name but none of these matched the copyright number we were given.A good reason why this will never ever land in a courtroom.
5.  We read about the lawsuit where they dropped the charges (I believe it was called Chenga?) because MF had used the compilation method. So are we in violation if this is the same method they used? Is this even a valid copyright form?these "charges" we not dropped, Masterfile LOST this case and the registrations were ruled invalid, this case is still in the appeal process, which is another reason they will probably not file suit anytime son, if they lose this appeal, their business model will be taking a pretty heavy hit.

If anyone could share any info with us or their experiences, we would appreciate it. We get that they don't care if we removed the image immediately or that we didn't use it on purpose and acquired it from a bad source. We don't make any money helping out this client and we do it to be nice. The economy here isn't that great and we help out with a few ads here and there so we wouldn't be paying that type of money for such a common image for a client that basically has no money to begin with for advertising.

We don't mind paying a reasonable amount but it looks like what we feel is reasonable and what they feel is reasonable is going to be the sticky part. Douglas Bieker does not know the definition of reasonable, he's shown this time and again..his job is to take your money, plain and simple.

Thanks!
 

[sunset]

Thanks for the reply Robert, much appreciated.

We haven't done anything except send an email to MF and ask that they deal with us and not our client. We haven't admitted to anything, where the image came from, etc. All we did was inform them that we had received their letter along with the snapshot from the website and that we had removed the image immediately once we received it.

As we said, this image was obtained from a blog offering free images for use. There wasn't any copyright on it and the image doesn't match MF's image 100%. Not sure where along the lines it was altered but we have read it doesn't matter if the image is altered or not. It's about a 20% difference from the original photo MF claims they own the copyright to.

We always buy our images and as I stated, we didn't use this image as intent to commit copyright infringement. Our client does not pay us for any of our work and is a family member. We create a few banner ads for them each year and this is where the image was used. All the other images on the website are photographs that we personally took. The website does not sell anything and receives no income from their website. It is merely a business presence for a small mom and pop operation that does not receive that much traffic.

Knowing everything that we know now (and we will NEVER use an image that is supposedly "free" again) what is the best course of action for us to take?

We have our "need to reply back to them" date and from what we have read we know this is a bully tactic they use to get people to panic and just pay. We are so glad to have found this forum and to understand that we don't have to pay what they are demanding.

The price they sent was for a license to use the photo for a year (as we read on this forum is standard practice for them). The image was up less than a month. Should we ask them to send us the copyright for that particular image? Should we reference the court case they lost using batched copyright files? Should we offer them what we feel is a fair price for that image based on how long it was used?

Any help in sending a reply is appreciated. Thank you to everyone on here and for your help. Obviously, we want to send the best reply possible.

Thanks again.

[Greg Troy (KeepFighting)]

I know Robert has had this issue with at least one client and he used Oscar's Letter program on the client behalf.  This way your client/family member will not be contacted directly anymore and will have to go through Oscar's office.

[Jerry Witt (mcfilms)]

sunset, they will deal with you up until the moment it becomes clear that you will not pay their full asking price. Then they will pester your clients.

[sunset]

Thanks everyone.

[Oscar Michelen]

They like to bother the client because the client likely  knows less about tech issues and will freak out more readily. We have invalidated MF's methods of copyright registration in a case called Masterfile v. Chaga,(discussed extensively elsewhere on this forum).   

[sunset]

Hi Oscar,

Thank you so much for taking the time to reply to my post—I know how busy you are. I can't express enough how much these forums mean and I know we would be freaking out if we didn't have them.

I read the entire case file for Chaga, which really was a God send for me. I know there were a lot of images and a lot of copyright registration numbers in this case.

Imagine how surprised I was to see that the same copyright registration number (different image however) that Masterfile lost in the Chaga case, is the same one they sent me "the letter" for.

We've had several emails back and forth and I cited the Chaga case and I asked for an individual copyright registration for the image. Of course they didn't have an individual one. They cited some other cases, which they felt would increase the validity of their appeal, and that they are currently appealing the Chaga case, and were confident their copyright registrations would hold up, so we should pay $1,360.

I offered them $250 to settle which we felt was a decent amount—especially since as it stands right now, the copyright for that image has been ruled invalid.

They send me back an email stating that we obviously didn't want to settle the matter amicably so they are going to pursue action and harass my client.

I am guessing this is where the NCS start insisting a debt is owed?

Any advice is appreciated.

Thank you.

[Robert Krausankas (BuddhaPi)]

NCS probably won't be involved at this point, what is going to happen is that Masterfile ( Geoffrey Beal most likely) will cut you out of the loop and he will harass your client, as ultimately they are responsible, and that douchebag Geoffrey Beal needs that check to come in so he can get paid, every person that fights back directly effects his income and his job security.. You might consider hiring Oscar at this point , so these assholes can't harass your client..If you decide to go that route, you may also consider sending one more email to MF and advise them to not contact your client as they have representation.

[Greg Troy (KeepFighting)]

Agreed, once Oscar is involved they can no longer contact your client.  Plus it drives Mr. Beal crazy when Oscar gets involved.

[lucia]

Plus it drives Mr. Beal crazy when Oscar gets involved.

Evidently!!

[sunset]

Thanks everyone! Much appreciated. 

[Jerry Witt (mcfilms)]

It seems to me if you hire Oscar on their behalf you saved yourself $50, shielded your clients from additional harassment, and joined the ranks of people that reject Masterfile's extortion scheme. I predict the day is soon coming where MF and GI will happily accept an offer of $200.

[Oscar Michelen]

Jerry - From your mouth to God's ears. I keep trying but they keep rejecting reasonable settlement demands.