Letter from Getty's solicitors re. Getty settlement demand (London, uk)

[ian wylde]

Hi,
I received a Getty demand on 11-08-2011, for my business Delta Tech Fire Services.  They are demanding £800.00 (approx $1600.00) + Irish VAT tax, for one picture my webdesigner used from google pictures in 2008. they claim 'Unauthorized Use of Getty Images' - I did not to respond to this letter
I received a second letter on 19-10-2011 demanding settlement again. I emailed Getty asking for proof of copyright, I enclose there response below:

"Dear Mr Wylde
Thank you for taking the time to this matter.
Getty Images has contracts with its contributing photographers who are the copyright holders. The contributor agreement contains representations and warranties that the contributor is the sole copyright owner. Due to confidentiality concerns, Getty Images would not provide copies of our contributor contracts at this stage of a claim. However,  the image details can be viewed at http://www.gettyimages.com/Creative. Simply enter the corresponding image number (ba60343) into the search box.  The use of an image such as this would have required permission from the copyright owner. 
In the absence of proof of a valid license obtained prior to use, this remains an unauthorised use and will be pursued.
Please note that we are going to escalate this case to our legal representatives if payment is not received by 31 JAN 2012."


I again chose not to respond as I feel that what they are doing is totally wrong.  On 12-03-2012 I received a letter from 'Simons Muirhead & Burton' (SMB), solicitors in London.  SMB state they have now been instructed by Getty to pursue the claim, they have mentioned the word 'Court' in the letter and the settlement amount is now £1,200.00 (approx $2,400.00) + Irish VAT - Why on earth are they charging Irish VAT in a United Kingdom case?

I have read ELI forums and searched on Google for info.  Im considering writing to Getty's solicitors, but hoped to get advice first.

I find what they are doing disgusting, our business a very small family operated fire protection business and this is causing stress.  It seems that ELI deal with US claims but hopefully someone can give me some good advice for my case?

Regards
Ian

[ian wylde]

Just been looking through previous messages on forums.. I should have done that before, going to try to get more info on previous messages - just time at work is tight!!

[Nodge]

Hi Ian,
Just to let you know that I'm in a similar position to yourself. I'm a sole trader working from home. So far I have just received the first letter from Getty demanding £1000 + £230 VAT. Although this site is US based I'm sure that most of the advice on here relates to the UK as well. As far as I can see, the crux of the matter is that Getty do not provide proof that they either own the copyright or have the right to manage it on behalf of the owner. They say this will be made available when the case goes to court. You should know that they have never taken anyone in the UK to court (except for one case which I believe had special circumstances). I believe it is a reasonable argument to say that you won't be discussing payments until they can prove to your satisfaction that they have a legitimate claim by providing the proof that you have asked for. You may feel that it might cover your back somewhat to make a much reduced "without prejudice" offer. Then if it ever did go to court you could show that you were being reasonable throughout and had a least made an effort to settle the dispute.
John

[ian wylde]

Thanks for your reply John,
I will seriously consider making a reduced offer, just concerend that could show guilt of somekind.

I have drafted a letter to send to SMB, looking to send it very soon.
Maybe I should have contacted Getty earlier, but, there communications do not encourage it.

[Couch_Potato]

Good luck whatever route you take.

In answer to your question about VAT, it's an EU rule that sales by a company to an individual resident in the EU must be charged VAT at the rate of the country the company is registered in.

Getty are registered in Ireland (for obvious tax advantageous reasons) and the VAT rate there is 21% (or it was when I last checked).

[getty victim]

Hi Ian Wylde,

I was in similar situation as you mentioned above. I replied to SIMONS MUIRHEAD & BURTON  (Getty Image's Solicitor) by post.

They sent me reply of my letter by e-mail. They have asked to pay 25% discounted settlement figure which comes out around £2000 + Irish VAT within 14 days.

I outlined in my letter that, I will not be able to engage in any future correspondence unless they prove me the ownership / right to managed the image by provide a copy of agreement. However they stated as follows:

* Getty Images (UK) Ltd. under their "Rights-Managed" licence model, and our client's previous correspondence with you should be taken as confirmation of their exclusive rights to license this content.

* Our client shall not be providing you with precise details of their exclusive licence agreements for the Images as they are confidential between Getty Images and their photographers. In accordance with Patents County Court guidelines there is a default position of non-disclosure of documents until the Case Management Conference level is reached.

* In view of the Civil Procedure Rules, we aim to settle all matters in a cost-effective way that is proportionate to the case in hand. This is in line with the overriding objective set out in Part 1 of the CPR Rules. Should you wish to pursue this matter in court then we will disclose documents as above.

* Getty Images base the settlement amount on the cost to license the Images in addition to other losses to them and to their photographers that flow directly from the breach. The settlement amount due is compensatory and not punitive in nature. Please note that the commercial value of the Images is not open to judgement, and is something Getty Images use their expertise in this field to calculate.

Have you got reply to your letter?

I would appreciate if you or someone in a similar situation or expert share their experience.

Thank you,

Getty Viticm

[Mulligan]

If the British translation is the same as the American, it appears to me that they're telling you, "Well, we have no legal proof or legal right to demand this money that'll stand up in court so send us the money anyway because we've just made it sound like we do have the legal proof or legal right."

The nonsense about paying the photographers and what a commercial image being worth being not open to judgement is what we call bullshit in America. I'm not sure what lies and misrepresentations like this are called across the pond.

[getty victim]

Hi Mulligan,

Thanks for your comments.

I would appreciate if someone from UK who is in similar situation as me would drop their comments or experience.

Thank you,

[Couch_Potato]

Getty Victim,

The only direct experience I have, of which I was not personally involved but knew the person who was, ended when the person made a final offer and informed Getty's lawyer that they had remitted that amount to their own lawyer which would be sent to them when they confirmed acceptance of the offer. The amount was fairly close to what they had asked for. That was about 7ish months ago I think.

Surprisingly there was no reply that the offer had been accepted or rejected so the person I know consider the matter closed and will enter into no further correspondence.

If I were in your position personally I'd write to their lawyer and say that Getty having the "exclusive" rights to the image does not actually give them exclusivity, they have acted in good faith that the photographer is being honest and also that the photographer actually owns the copyright. I'd state that being asked to pay a large amount of money means I am not willing to extend the same good faith and so documentation will be required to prove that the photographer who claims the rights to the image actually does own the copyright and proof by way of a signed letter that the photographer has given exclusive rights to Getty and that while assigned to Getty that have never licensed the image elsewhere.

There is no right or wrong way to handle this but you have to understand that anything but paying the full settlement means, however unlikely, that they can file suit against you.

Your reply should not be based on what you solely read here because ultimately you are dealing with it yourself. If you have the stomach for the fight because you honestly believe you have done nothing wrong then your next move will be very different if you either don't have the stomach for a fight or took the image from the web yourself without regard for the copyright.

[Nodge]

Just thought I'd give an update on my own situation. My first Getty letter was dated 23 Feb 2012 and demanded £1000 + £230 Irish VAT. My reply to this letter confirmed that the image in question had been removed and stated that it was my belief that the image had been obtained legitimately from a source other than Getty Images and so hoped this would be a satisfactory end to the matter.

My second letter from Getty was dated 27th April and was pretty much a repeat of the first. There was no acknowledgement of my letter. My reply was dated 14th June and while admitting no liability, included an offer to settle (much reduced) if they could supply me with proof of copyright etc. Coincidentally the same day that I posted this letter I had a phone call from Getty Images trying to get me to pay their settlement demand in full. I told the girl that there was an offer of settlement in the post but she said that if I couldn't settle there and then the matter would go to their legal department.

On the 9th July I had a letter from Simons Muirhead & Burton repeating Getty's claims of copyright infringement. However, the amount now being claimed has risen to £1,722 inc VAT with 21 days to pay. There was no mention of my previous letters or offer.

I'm now in two minds whether to ignore them completely as they have done me or to reply stating that any further unsubstantiated demands will be regarded as harrassment intended to cause distress and that they would then be reported to their local trading standards office for possible breach of the Malicious Communications Act 1988 and the Adminstration of Justice Act 1970. I suspect it really doesn't matter what response I make but I welcome your comments.
Thanks
John

[Couch_Potato]

Again, why is VAT being charged when HMRC guidance is clear. I'd call them out on it. I've reviewed the HMRC website and it is clear VAT should not be charged on a settlement where there is no supply of taxable goods.

http://www.lawgazette.co.uk/news/vat-settlement-disputes-0

This website sums it up quite well, it is dated 1992 but I have reviewed the HMRC website and this is still currently valid. If there has been a change in law then I cannot find it and I'd ask Simons Muirhead & Burton to clarify.

I would post the HMRC link but their website breaks up that summary into various pages.

Here is what is states:

"Press notice 82/87
The press notice had been issued with the object of restricting its application to genuine disputes only. If a settlement agreement was worded in terms that the plaintiff was giving up rights to sue the defendant in exchange for a sum of money, this was not a supply."

Don't the Getty letters state that in return for payment they are giving up their right to sue?

It goes on to state:

"Payment by way of compensation in respect of a past transgression was outside the scope but payment in consideration of allowing the future use of the copyright material was in respect of a taxable supply."

The bottom line is there should be no VAT payable on these settlements and the only reason they would want to charge VAT is to balance off against their VAT expenditure in the hope of claiming it back.

If they are trying to agree a price for past use so that it becomes a sale they should not be threatening any legal action if you don't pay. Imagine walking into a shop, picking up a pair of shoes to look at and then being told if you didn't buy them they'd sue you.

If they confirm that it's not a settlement but a debt, then normal debt laws apply (not that a debt exists) which they've breached several times already and you can complain to the OFT.

[Nodge]

Re. the VAT issue, Getty's letter states the settlement is for " the use of the image in question. Payment of the attached demand will settle your company's unlicensed use of the referenced image". The letter from Simons Muirhead & Burton states the payment "represents the licence fee, costs and legal fees". Getty's letters say that if payment is not made then the case will be escalated to their legal department with the likelihood of increased costs. As the payment is partly towards the license fee for the image concerned then I suppose that would constitute a supply of goods? The letters don't say that in return for payment they are giving up their right to sue.

John

[Couch_Potato]

Are you sure? The wording usually states that in return for payment it guarantees they will not pursue any further action for that infringement. Without that you'd be crazy to pay (it's crazy to pay anyway.)

If they aren't claiming it's for a settlement then they can't be claiming an infringement and you can simply decline their offer.

[Nodge]

Having looked at Getty's letter again it does say "The payment of this settlement demand will release you from any legal claims by Getty Images relating solely to this identified past infringement". This would appear to fall within the terms or your press notice 82/87 stating that this is not deemed to be a supply. I suppose it wouldn't hurt to raise this question with Simons Muirhead & Burton.
John

[Couch_Potato]

Well as pointed out on a different thread the FAQs on the letters now state VAT is payable because legal settlements in Ireland are subject to VAT.

However I don't see why it should apply when the letter comes from their UK office and the letter from their lawyer states you should pay them and not Getty. There is no service whatsoever being supplied from Ireland.