Copyright Damages for Unauthorized Use of Photos Online

Nancy Mertzel
5 days ago
3 min read

warner v nealy supreme court case — Photo by Luis Quintero via Canva

The widespread use of photographs to enhance websites and social media posts has led to a dramatic increase in allegations of copyright infringement. Use of photos without permission is often inadvertent, sometimes due to a misunderstanding of license terms, reliance on third party content providers, or a mistaken belief that images posted online can be used without a license. In response, copyright owners and their agents, some of whom have been deemed “copyright trolls” by the courts, routinely send demand letters and file lawsuits. Read on for an overview of potential damages, trends in how courts assess damages, and practical guidance to help minimize the risk of using photos online.

Overview of Copyright Damages

The Copyright Act permits copyright owners two options to recover monetary relief: actual damages or statutory damages. A copyright owner may decide which type of damages to pursue at any time before a final judgment is rendered by the court. 17 USC § 504(c)(1).

To recover actual damages, the copyright owner must prove the specific monetary amounts it seeks to recover due to the infringement: either the actual losses it suffered or the profits of the infringer that are attributable to the infringement. The copyright holder is required only to prove the infringer’s gross revenue; the infringer must prove deductible expenses and elements of profit attributable to factors other than use of the copyrighted work. 17 USC § 504(b). Courts often consider the “fair market value” of a hypothetical negotiated licensing fee when calculating actual damages.

Alternatively, a copyright owner may ask the court to award statutory damages, without proving actual losses or the infringer’s profits. To be entitled to statutory copyright damages, a copyright holder must have timely registered its copyright with the Copyright Office. For unpublished works, no recovery can be made for infringement commenced prior to the effective date of the registration. For published works, no recovery can be made for infringement that occurs after first publication and before the effective date of the registration, unless the registration was made within three months after first publication. These same rules also apply to an award of attorney’s fees. 17 USC § 412.

The standard range for an award of statutory damages is $750 to $30,000 per work, at the discretion of the court. Damages can be increased up to $150,000 in cases of willfulness and reduced to $200 in cases of innocent infringement.

Trends in the Courts

While the amount of statutory damages to be awarded is discretionary, courts frequently consider a reasonable license fee as the base amount. Copyright owners typically attempt to rely on licenses and settlements with third parties, while defendants seek to rely on pricing for images of similar value from stock images sites.

To deter future infringement, courts sometimes apply a multiplier to the base amount. Multipliers of two or three times are common, with higher multipliers used where the defendant has acted improperly, such as cases of repeat infringement or evasive conduct.

In awarding statutory damages, courts generally try to avoid excessive amounts that would constitute a windfall for the plaintiff. In the absence of bad faith, a court may award only nominal damages or the statutory minimum.

Best Practices

To minimize the risk of receiving a demand letter or being sued for unauthorized use of photos, we recommend adopting a copyright clearance program. Proper clearance means obtaining a license, unless the work is in the public domain or royalty free. Do not rely on the absence of a copyright notice or embedded watermark. Licenses can be obtained from stock sites including Getty Images, iStock Photo, and Shutterstock. Caution should be taken in using photos from sites purporting to provide free photos as they may not stand behind their content or provide any warranties.

Save and document all licenses you obtain. Pay close attention to the scope of the permitted use, including whether commercial use is allowed, and limitations on use such as for websites and social media.

If you receive a demand letter or get sued, contact experienced copyright counsel immediately. For additional tips, check out our article published in the New York Law Journal entitled “Strategies for Avoiding and Responding to Copyright Troll Litigation” (2020).

Feel free to contact us if you have questions about copyright damages or would like help setting up a copyright clearance program for your business.