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The Economics of Copyright Infringement in Robert Caplin vs Perez Hilton

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Freelance photographer Robert Caplin filed a copyright infringement and DMCA violation complaint on June 26, 2013 against Mario Armando Lavandeira, Jr., aka Perez Hilton. Hilton is best described as an Internet gossip blogger, who has been known to appropriate copyrighted images and then “transform” them by drawing captions, tears, or other scribbles, and thereby claiming “fair use.”

His well-trafficked entertainment blog sells advertising to support itself. Caplin is a regular contributor to the New York Times, Wall Street Journal, Los Angeles Times. He also runs The Photo Brigade, is a prolific Instagrammer, and is an all around great guy. And I don’t like to see Perez Hilton stick it to great guys.

In this particular case, Caplin had posted thirty-two photos of Glee’s Darren Criss on his PhotoShelter website that also accompanied a New York Times story concerning Mr. Criss’ Broadway debut. But unlike the photos that accompanied that article, Caplin had posted a copyright notice AND watermarked each image with his logo.

In other words, it was unambiguous that the images were not in the public domain, and would require permission to use them elsewhere. Further, Caplin had enabled PhotoShelter’s “Image Theft Guard” feature which disables right+click or dragging of images to copy them to the desktop.

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Lavandeira circumvented these controls by screen grabbing fourteen of the images, removing the copyright notices and applying his own watermark to the images. So Lavandeira:

  • Committed copyright infringement by publishing the images without permission
  • Willfully infringed by continuing to publish the images even after he was notified
  • Committed a DMCA violation by removing the copyright management information from the images

Rather than immediately taking a litigious position, Caplin called Lavandeira and spoke to him directly as alleged in the complaint. Lavandeira allegedly apologized and agreed to remove the offending images from his website. A reasonable tact with a quick and friendly resolution… except Lavandeira didn’t take down the images.

So Caplin hired the Law Office of Carolyn E. Wright, LLC (aka Photo Attorney) to represent him. Caplin tells us, ”We attempted to resolve the matter prior to filing suit. While Mr. Lavandeira’s attorney acknowledged our effort, we received no other response. My goal with this litigation and with all of my actions is to protect my intellectual property.”

A screenshot showing one of the offending uses.

A screenshot showing one of the offending uses.

There has been a lot of speculation over what Caplin could gain by taking it to the courts. So what is Caplin due?

The “value” of the damages can be either “actual” or “statutory.” But an actual damage can be notoriously hard to calculate. So let’s start with the statutory.

According to US Copyright law, 17 USC § 504 (c) 1 allows for between $750 – $30,000 per infringed work. So 14 images x $30k = $420,000.

But given that Lavandeira was notified of the infringement and failed to act upon it, and that there are at least 4 previous complaints filed against him, he may be found a willful infringer, which would expose him up to $150,000 per infringed work (17 USC § 504 (c) 2). 14 images x $150,000 = $2.1 million.

Additionally, Lavandeira violated the DMCA 17 USC § 1202 by removing copyright management information from the image. The DMCA provides for $25,000 per infringed work. 14 images x $25,000 = $350,000.

Thus, Lavandeira could be exposed to statutory damages of up to $2.45 million dollars.

That is FANTASTIC, except no judge in his right mind would ever award that amount. Why? Because even with willful infringement, it’s hard to justify this amount as “reasonable.”

Caplin (left) and Hilton (right)

Caplin (left) and Hilton (right)

I spoke with Fordham University Professor of Intellectual Property Britton Payne about copyright and DMCA infringement. While it’s impossible to guess at the probable outcome, he does point out that cases like these are usually settled out of court for the simple reason that litigation is expensive.

When I asked him to hypothesize on settlement amounts, he posed the following as a way to estimate actual damages for the purposes of coming up with a settlement amount.

  1. What would the licensing fees have been?
  2. What is the value of any single post on PerezHilton.com?

Calculating licensing fees:

A 3-month web license for getty runs $49/image. So without even considering a bulk discount, the value of 14 images would be $686. A court might triple the lost license fee as a disincentive for further infringement, so let’s call it $2,058.

Calculating the value of a single post:

Let’s assume Lavandeira 1) generates $10 million in gross revenue per year through the sale of advertising, 2) posts 100 times per day every day. The value that each post brings is $10m / 365 days * 100 posts per day = $274. Even at $20 million in revenues, the value is only doubled to $548, which is pretty close to the calculated licensing fee.

Tack on $30,000 in legal fees, and we’re talking about a total value that’s far from $2.45 million.

money

Payne points out that it would be surprising if the case was settlted strictly on the calculated value. All the time and headache to pay off your lawyer and put a few hundred bucks in your pocket makes no sense. A doubling of the amount, say $60,000, would make more sense, but it’s still a far cry from millions. So what’s the end game?

Lavandeira’s inaction made the legal remedy somewhat of a necessity to protect Caplin’s IP rights. And if Caplin is successful in recovering damages, it makes an example of Hilton. But there is no certainty around the award amount, and unless Caplin is really willing to go to court and paying enormous legal fees (which he may or may not recoup), it’s really a gamble.

A negotiated settlement is still the likely outcome, and the party with more patience (and perhaps deeper pockets) stands to “win.” The publicity is great for the industry, but it’s unlikely to translate into more business for Caplin (unless he’s suddenly bombarded with speaking engagements).

We are rooting hard for Caplin in this situation, but given an explanation of the economics, you can see why even seemingly clear cut copyright infringement cases are a financial gamble for individual photographers.


About the author: Allen Murabayashi is the Chairman and Co-founder of PhotoShelter. Allen is a graduate of Yale University, and flosses daily. This article originally appeared here.


Image credit: Money by Tax Credits


 
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  • Pascual Cora Jr.

    Wait so you telling me that a judge would not rule that this buffoon should pay the 2.4 million dollars worth of fines because is not “reasonable” yet judges handout extravagant ruling in favor of the RIAA like this one? How convenient.

    http://www.wired.com/threatlevel/2007/10/riaa-jury-finds/

  • dainbramaged

    Start a kickstarter for his legal fees. I’ll contribute some. We work hard to create our images. If this was any other medium there would be possible jail time. This is theft.

  • lololalallll

    If music companies can sue people for millions of dollars for copying songs, then a photographer should be able to sue for millions as well.

  • Grizzly_Atoms

    He DESERVES to get hammered with a huge judgment! If a college kid sharing songs without trying to make a profit gets nailed for millions, this scumbag deserves the same punishment at a minimum.

  • ramanauskas

    So Payne’s view is that the law provides for statutory damages for no reason at all? That the statutory damages specified were just a little joke by Congress and not to be taken at all seriously? That if you steal something, you can wait until you’re caught and just say, “ha, ha, ok, I’ll pay you what I think the stuff is worth and it’s all good”?

    This makes me think that Payne is a very bad law professor.

    Oh, also, even if we accept the theory that the statutory damages can be ignored–Getty? Please. Getty are low-balling, scumsucking, bottom feeders and their rates are in no way representative of what an actual professional photo agency would get. Try using rates from, say, Magnum.

  • tonyc0101

    Most, if not all, people who copy songs don’t remove the original artist’s voice, mix in their own voice on the track, and re-upload or distribute the song as the original work…which is essentially what Lavandeira did, photographically. The courts definitely should take notice of his reasoning to covering up his theft.

  • Alan Dove

    You should also calculate how much value a high-profile lawsuit would add to PerezHilton.com. In Lavandeira’s line of work, there’s no such thing as bad publicity.

  • Alan Dove

    I did not mean for that web address to show up as a link – that happened automatically.

  • Jared

    That almost proves your point, though. A mere mention of his name or website generates links by automation, because that’s what the internet does. So this helps him indirectly.

  • gochugogi

    You may recall in the early 1990s major rap artists were sampling and looping other artist’s tracks and rapping over them, and making millions. And many were hammered with copyright lawsuits. Now they tend to bury the track so deep in the mix you can’t recognize them…

  • garett hernandez

    If i read his trash I would stop and call for a boycott. People should boycott perez hilton!

  • tsu

    Magnum is a specialized boutique agency for Reportage. If you want to compare apples to apples, then compare Magnum’s rates to Getty Reportage. Getty is huge, with multiple departments. You can’t compare Getty’s stock division even to its own specialized boutique agency Getty Reportage. They’re completely different. Much like Magnum is.

  • TheInternet

    Considering this time a photogrpaher has actually decided to sue Perez I feel like a proper investigation into his website to see if there are any other violations of copyright…The website has been around for a long time, I doubt this is the first time he has screenshot images etc….Lets sue him for all he’s got!!!

  • http://twitter.com/Theranthrope Theranthrope

    You fool!
    What do you think copyright is there to promote the progress of science and useful arts?! It exists to protect the interests of a few gigantic incumbent multinational media cartels at the expense of everyone else, because megacorporations are (legally) people… People with rights and feelings which can be hurt and need to be protected… by guys with with badges and guns and riot-gear and tanks.

    Although, you non-megacorporation-type people don’t get the same protection, because… er… because… um… TERRORISTS! If you don’t support the megacorporation’s feelings THE TERRORISTS WILL WIN!

  • ramanauskas

    Caplin’s stuff isn’t “stock photography”, so still less can you guess his actual rates by using the bargain-basement division of that low-rent operation.

  • http://twitter.com/Theranthrope Theranthrope

    (I wish this was satire)

  • http://twitter.com/Theranthrope Theranthrope

    How about: no.

    Perez is a repellant waste of meat, for this, and many other reasons, but on the other hand; Caplin is a professional who can fight his own battles.