Getty and Flickr: Prophesies Coming True?

People have been emailing me copiously, asking for a statement in response to the new relationship between Getty and Flickr, where Flickr members and visitors can work with each other through a new program with Getty Images called “Request to License”. The details of this program are listed here. From that page:

When a prospective licensee sees an image marked for license, they can click on the link and be put in touch with a representative from Getty Images who will help handle details like permissions, releases and pricing. Once reviewed, the Getty Images editors will send you a FlickrMail to request to license your work, either for commercial or editorial usage. The decision to license is always yours.

Why are people asking me about this?

For years, I've been proposing that precisely this model be implemented. Most of my blog entries in 2007 and 2008 articulated this very model. The first was on Feb 13, 2007, in an article titled, "The future of photo sharing sites and agencies". There, I predicted the inevitable convergence between companies like Getty and Flickr:

I believe it will invariably happen that major photo agencies like Getty and Corbis can (and should) move into the consumer market. Consider what would happen if major stock agencies expanded their businesses by opening the flood gates and letting everyone in. By removing the barriers that require photographers to "submit images," and having a separate portion of their sites be entirely open, much like other photo-sharing sites are, they would give more options to buyers, and provide more opportunities (and greater incentive) for photographers to join at all levels. Getty owns iStockPhoto.com, which is a microstock agency that sells images for much less, but this is not a consumer-based, social networking style photo sharing site like flickr is.

The key here is in italics: microstock agencies are not social networking sites, they are therefore limited by both buyers are sellers than the social-networking sites. My premise for this logic is based on my years of research showing that 80% or more of licensed images is peer-to-peer, directly between buyers and photographers, not among agencies. You can read this research in the article, "The Size of the Photo Licensing Market"). The summary of that research is this basic truism: Most buyers find images on non-stock agency websites.

On Feb 18, 2007, I wrote how the photo-sharing and social-networking sites can capitalize on this opportunity in an article titled, "Two-Phased Approach to photo-sharing/licensing model". I said:

Phase One of this business will be where a photo-sharing site merely allows visitors to license images directly from the site. Phase Two will involve the distribution of the same photo assets to other sites, much the same way online ad sales are hosted (or "published") on other websites. ... For the sake of discussion, I'm going to assume that the approach ultimately adopted is the one I've suggested in the past: make it pure and simple by giving the user a toggle for setting whether his photos are (or aren't) permitted to be "sold".

And that's exactly what Getty and Flickr are doing now. Over four years later.

You may note that I said there was a two-phased approach. That second model will eventually become part of more photo-licensing business models. (In fact, it already exists, but among companies too small to get anyone's attention--partly because the technology and business models they've adopted do not properly understand and implement the true nature of photo licensing, copyright issues, and potential target markets. This is an aside for the moment; it may come up again when larger players eventually begin to consider the opportunities.)

Speaking of predictions, I remain steadfast in my opinion of the inevitability of what happens next:

In July, 2007, my blog post titled, "The Solution to Getty's Woes" explained how Getty can get out of its financial troubles by simply buying Flickr directly from Yahoo and using it as the main stock licensing engine. The article got into exceedingly detailed analysis of Getty's financial model (and troubles) combined with the explosion of available imagery on sites like Flickr that make this solution not only obvious, but inevitable.

On a directly related note, I called into question the life expectancy of the Creative Commons in this article (2008), where I again proposed that Flickr allow users the option of choosing between allowing their images available for free via CC, or to get income from their images. I said,

...it begs the question about whether enough people would choose the option to "make my images free"(CC) if it were next to the checkbox that says, "pay me a quarter if someone's dumb enough to buy it."

And then there's the buyer. If they were given the choice between "free images, with disclaimers and risks" and modestly priced images without such risks, it wouldn't be very likely that the "free" versions would be chosen very often.

The concept of CC would never survive under these two conditions.

Without getting too far afield, I have no qualms with the CC, per se. It's more about how simplistically it's been designed and deployed. It's just not sustainable in the real world business market. The problem is not the "license terms" and the structure of the legal contracts--those are all just fine. It's the fact that the system can be gamed so easily by both buyers and sellers, that it's too unreliable to be sustainable beyond a small handful of casual users (by comparison to the larger market of stock imagery). The true protections for both buyers and sellers is to leverage the copyright registration mechanism. That is, creative commons images that are also registered with the copyright office lowers the risk both both buyers and sellers, as explained in that article. Since no one is building copyright registration into their online business models, and the CC itself has a fundamental objection to the concept of copyright in the first place, the CC will be relegated to an historical footnote , bringing strength back to the for-fee licensing model. And which brings us back to why I'd always argued that Flickr should have enabled image licensing.

So, why is this all good for the photo licensing industry? I articulate this answer in the blog entry I wrote on March 15, 2007 in the article titled, "Photo-sharing-licensing sites leveling the playing field."

As more companies engage in the business of licensing images, photographers with credibility will gravitate to the sites that offer a better return on their money... In a way, this is how photo agencies started in the very beginning, only better: because photographers don't have to be "accepted," the playing field is much more level, and the market forces can be more free to let the money flow to those who really do merit the higher earnings (rather than at the whim of photo editors). The buyer, it turns out, is the best photo editor, and it will be pretty clear in short order which sites are hosting good, honest content.

I summarize with another excerpt from that article:

...the most basic, fundamental truism about photography remains: there are more people who have it as a hobby than as a profession, and the barrier to entry is low... the honeymoon period for Getty will end once photo-sharing sites become new outlets for photographers where the open market can decide their rates."

Quick Note on Current Orphan Works Disinformation

I am being mildly bombarded with questions and mostly links to articles on other photographers' blogs about this one bit of disinformation about the Orphan Works Act, so I thought I would write a very short blog entry to set the record straight.

The disinformation being passed around everywhere is this:

"Someone can now steal your photo and claim it's an orphan work, and you have to spend $50,000 filing a lawsuit just to prove them wrong. No photographer can do that!"

Folks, this is a senseless argument because someone could steal an image and claim anything, not just that it's an orphan work. They can claim they shot it themselves, or that they're using the work under Fair Use provisions, or that it's got a Creative Commons License. Any of these arguments could be entirely baseless and untrue. If the argument is that the photographer would have to spend $50,000 to go to court, and he can't or won't do that, what makes the OWA any different than any of these other threats?

The reality is that the photographer does not have to spend money to go to court or even "hire" a lawyer. All the photographer has to do is engage with a lawyer on a contingency basis (where he is paid only if money is collected), write a letter to the infringer that says that says that their use of the image is a copyright violation, that the statutory damages for such a violation ranges from $750 to $30,000, but an amicable settlement can be reached.

At this point, the infringer has a decision to make, is he going to spend $50,000 going to court to defend his claim that he's protected by the Orphan Works Act? Or is he just going to pay the photographer a couple thousand bucks just to make the problem go away? Remember, the infringer's lawyer costs $500/hr, so he already has to spend that much just the show him the letter you wrote and draft a reply. The lawyer is also going to advise his client that, in copyright infringement claims, the onus is on the defense to prove their case, not the other way around. What's more, if the photographer wins, he gets his legal fees reimbursed. But if the infringer wins, he does not get his legal fees reimbursed. Even if the OWA really did provide a mechanism for infringement -- which is does not -- the defense still has the burden of proof, and has to spend the money to do so, and he does not get that money back. In short, infringing bears nothing but risk.

You can argue up and down the merits or details of the OWA till you're blue in the face, but the pragmatic reality is that the infringer will pay the photographer a settlement, even if he thinks he's right.

And that's why a lawyer will be willing to take your case on contingency. You don't have to spend a dime to protect your works.

And you never did.

The Economics of Controversy

There’s an old folk tale that tells of Neil Armstrong having sent a letter to the leader of the Flat Earth Society with an enclosed photo of the Earth taken from space. His one-line inscription simply read, “SEE?!” To which Armstrong got a reply saying, “We never said the Earth wasn’t circular!”

With some people, there are arguments you just can’t win, no matter how persuasive the evidence. And most of the time, such arguments aren’t worth having anyway.

Other arguments are worth having because you really believe in the cause.

Some arguments go on so long, they seem both endless and senseless. Remember the Monty Python skit about the man who pays another man to have an argument with him? The first thing they start arguing about is whether or not he even paid. “No you didn’t!” “Yes I did!” “No you didn’t!” “Well if I didn’t, why are you arguing with me?” “I could be arguing in my spare time!”

And then there are those arguments that turn into “controversies.” These are special arguments where the issues galvanize core groups of supporters on both sides, tempers flare, and before you know it, it’s no longer a Monty Python skit.

Though it may be odd to see it this way, here is where new economic ecosystems begin to form. As a controversy gains momentum, more and more people benefit in one form or another by keeping it alive. If it garners enough critical mass, real money can be made, social fabrics can be formed, and political affiliations created. All of these represent different goals and objectives for the individuals involved, which make the intertwining of motivations, methodologies and psychological dispositions fascinating for behavioral economists: those who study people’s behaviors as they pertain to market conditions and self-interest.

In the photography world, there is no better place to study behavioral economics than in the controversy surrounding the Orphan Works Act. And from these observations, one can look for known patterns of behavior that themselves help forecast where there may be investment opportunities.

The Controversy: The Orphan Works Act

The OWA happens to be the perfect controversy because its complexity involves both law and economics, each of which are beyond most people’s understanding, even the leadership. This makes it ripe for oversimplification, misinformation, disinformation, and persuasion.

In the case of the OWA, many who preach aspects about it simply aren’t educated enough on the fundamental principles involved to understand what they’re saying, and the “base” followers are not the type to ask questions—just to “believe.” Straw-man arguments are thrown up all over the place. The classic example is one that I mentioned earlier here: "someone can now steal your photo and claim it's an orphan work, and you have to spend $50,000 filing a lawsuit just to prove them wrong. No photographer can do that!" This is the galvanizing argument that's now settled into the mantra in photo discussion groups.

As my blog post points out, it's a senseless argument because someone could steal an image and claim anything, not just that it's an orphan work. The summary of that article is that it's the infringer that has to spend $50,000 in court to defend his claim that he's protected by the Orphan Works Act. The pragmatic reality is that the infringer will pay the photographer a settlement, even if he thinks he's right.

Yet, none of this very basic, standard legal information is disseminated by anyone in the artist community hierarchy, the photographer community in particular. In fact, quite the opposite. But why?

Once again, it's all about behavioral economics: there are benefits to keeping the issue a controversy, and in keeping the controversy alive.

The Players
Several unique sets of conditions converged at once that allowed the OWA to become the nuclear power station within the photographer community. The stock photo industry has been suffering from economic hardship for quite some time, which itself has threatened industry leaders and organizations, who naturally respond by finding galvanizing issues to maintain control and continuity.

At the bottom of the ecosystem are the core (“base”) believers who are told they have a stake in the game: "If the OWA passes, you will lose your rights to protect your images." The base believers buy into this, and reap psychological dividends by being part of an impassioned movement against the OWA. It’s in this ecosystem where there is a rather dogmatic and cohesive community that typically responds well to populist rhetoric, while being derisive of non-conformist views. In fact, the use of populist rhetoric is prototypical among leaders of economically distressed groups.

On the sidelines is a panoply of catalysts, eager to participate as well: reporters who objectively journal the events, investigative reporters who tell the story from behind the scenes, lawyers and media consultants who work on behalf of their clients to effect a certain outcome, analysts who churn the data to assess the likelihood of various outcomes, and the investors who seek opportunity. Everyone has a vested interest in the process. And therefore, such people become participants.

I too am a player in this eco-system. I’m an analyst, and my economic benefit is the clientele who pay me to do objective research so they can make financial decisions (investments or divestments) based on the likely outcomes of certain events. The Orphan Works Act is one such event. Since it also happens to be a hotly controversial one, at least within the photography ecosystem, the question for these investors is not whether the OWA puts the future of image licensing at risk, but where’s the opportunity for investment? Smart money goes to companies and individuals that know how to capitalize on opportunity. In this case, opportunity lies within those organizations that have a solid, realistic understanding of the state of affairs. My job is to find those opportunities.

Analyzing the Ecosystem
To understand how I do this, I talk to people. For example, I had a conversation with a lawyer who has been rather outspoken against the OWA on behalf of a trade association for a different industry. I asked, “If the OWA passes, and if a case came up that you had to prosecute an infringer who tried to hide behind it, what would your strategy be for dealing with this?” Essentially, I was given a more balanced legal analysis on why the OWA isn’t a threat to artists. The response I got was used as the basis for this blog entry, modified to address the photo space:
http://www.danheller.com/blog/posts/orphan-works-act-courts-and-law.html

So, I then asked, “Why don’t you say anything like this publicly?” The response: “Because my client doesn’t want me to. I’m paid to make these statements and support the objectives of my client.” To which I replied, “Why aren’t you telling your client to soften up on the OWA?” And then came the unsurprising answer, “Because it galvanizes their membership. Renewal rates are up, and they haven’t seen as many new members join in years.” One can only surmise the additional social and political dividends the leadership receives as a result. Short-term economic benefits clouds longer-term judgment. Text-book Behavioral Economics at its finest.

Needless to say, the companies and individuals that hired this lawyer would not be considered “worthy investments” by my clients. (There’s nothing wrong with the lawyer, of course; but that’s not who the investors are interested in.)

To illustrate a more tangible, but more complex example, recall the time when Getty was looking for a buyer to take it private. The company was public, but its share price was dropping quickly, revenue and profits were evaporating, and the nature of stock photography itself was going through a major transition.

One particular suitor asked me to look into an element they believed to be a vulnerability of the company: the economic effect of being “responsive to photographer demands.” Because the investor believed that Getty made key strategic decisions based what its photographers wanted, the question was whether photographers' demands were economically sound. That is, if Getty appeased photographers, would they make more or less money as a result?

A hint that gave them concern was Getty’s acquisition of iStockPhoto. It wasn’t the acquisition that bothered them, of course. It was a good investment. The concern was: why did it take them so long? If Getty was an innovator in the stock photo industry, they should have done this years earlier--not late in the game. The critical question was: what slowed them down? The answer is photographer objections. Because Getty defers to photographers too much, they have a record of failing to make wise, profitable and economically sound business decisions.

What might the long-term risks be? Are photographers always so wrong? Or is this just an isolated case? What does this say about the future? Would Getty lead forward, or will photographers hold the company back, causing the company to miss or delay other key strategic moves as well?

What I was asked to research had nothing to do with Getty, per se, but the effectiveness of pro photographers’ influence on their own industry. Specifically: at key turning points in the economics of the photography world, what were the “photographers’ positions” on those events, and were their forecasts right? Did they fare better or worse as a result of their collective recommendations to their community membership?

Without getting into the details of my report, the data was rather bleak for photographers. In the 1970s, after the supreme court ruled that the ASMP violated “restraint of trade” rules by publishing price lists, the union was disbanded, and a power vacuum resulted. A variety of disparate trade groups started forming, each of which differing only slightly from the others. Yet, at no time did the socio-political strategy change; the culture of the photographer community remained strongly union-oriented. The message remained “all for one” with a strong discouragement of individuality in building a career. Conformity was and always has been the social rule, which itself runs counter to open-market economic conditions.

At no time did I find any key recommendations by the pro photographer community that resulted in positive economic returns. At one point, they discouraged photographers from shooting “stock imagery” because it would “ruin the careers of assignment photographers.” They also discouraged using the internet as a place to sell photos because “people will only steal them.” They also said it would “compete with traditional stock agencies” (who themselves resisted using the internet till royalty-free images moved from CD-ROMs to internet sites). Their poor analysis and responses to matters such as royalty-free, microstock, social-networks, consumers, semi-pros and other industry trends have all been entirely off base. I’ve written extensively about each of these phenomenon at great depth on my blog.

Photography trade associations’ economic advice has also been similarly off target. Membership levels in most all groups have seen very little (if any) growth, despite the fact that hundreds of millions of more people own high-end digital camera gear and contribute larger and larger proportions of images to the stock photo base. The outright rejection of the consumer and weekend photo enthusiast has been one of the primary factors associated with their inability to grow financially, which has also weakened their political influence. (At one time, I recommended that PDN and trade associations charge a maximum of $25/year for subscription and/or membership fees and start running programs that appeal to non-pro photographers that somehow engage in monetizing their images, even at lower levels.)

An incident in my report that summarized it all was when the SAA sent a letter to Getty images strenuously objecting to their having lowered photographers’ royalty rates, seemingly unaware that the company’s sales and profits were plummeting. (This would be like auto worker unions asking General Motors for raises just before they go into bankruptcy.)

Of course, the responses from trade associations have always been akin to “we are giving advice, but no one is taking it; if photographers did what we advised, then we wouldn’t be in this mess.” The reality is, they are taking the advice, but it isn’t working. At some point, one just has to realize the Earth really isn’t flat, and it’s not worth having that argument anymore. There simply needs to be new blood. There’s too much homogeneity. There’s no tolerance for dissent. Perhaps the best quote that encapsulates this situation is one from the 9/11 Commission Report about the errors in judgment that lead up to invasion of Iraq: “When everyone around the table agrees, someone’s got it wrong.”

In general, photographers have had no true economic leadership, and this has lead to a vacuum of economic opportunity. And the evidence is as overwhelming as the Earth is spherical: extremely few stock photo agencies are profitable, and of those that are, the margins are slim and getting slimmer; “publicly traded” stock agencies have had to take themselves off the market (well before the economy turned downward); most stock photographers have reported declining incomes steadily for years; and the per-image license fees have been dropping since records were kept.

When I collect data and do analysis to generate these reports, I have no personal objective, vendetta, or an argument to settle; I don’t care. I just want to be accurate so my clients can make fiscally responsible decisions. And I’m not the only one to come to these conclusions. With the exception of a few very speculative investors, the “smart money” stays away from anything in the stock photo sector. As one of my clients put it, “so long as a company is reactive to the pro photographer community, it’s a losing investment proposition.”

The problem is, there are too few companies that deal with stock photography that don’t worry about the political fallout from discontent raised by the photographer outcry.

If this is the case, why doesn’t the photographer community leadership recognize this and adjust their message to the base? Here’s where we come full circle to behavioral economics: there’s money, politics and reputations involved. Different people seek different objectives, and without centralized leadership, you hold onto what you’ve got. As one executive at a trade association told me, “It’s the perfect controversy for us because we win whether it [the OWA] passes or fails. If it fails, we can say we won; and if it passes, then our members will benefit, and we can say it’s because of what we did. Taking a stand against it is the only position that makes sense for us. Besides, it brings everyone together.”

What Investors Look For
Smart money, smart lawyers, and smart legislators all know that there are no risks to either artists or licensors with the OWA. So, the political theater from the blogosphere is uninteresting to investors, other than to know where not to invest. Investment money looks for signs of intelligence. Any company or investor making business decisions based on photographers’ outcries would be considered a poor investment.

But don’t confuse this with an anti-photographer sentiment. Investors are not anti-anyone. They just don’t want those who don’t understand economics interfering with business. If a company were to exist that keeps photographers happy, while also pursing business goals that show profitability, then that’s great. But the catch-22 in this economic climate is the challenge: the internet and digital photography changed the game from how photographers once viewed themselves, and unless and until they change their cultural disposition, they’re not going to be part of the solution. The stock photo industry has already shifted to be a high-volume/low-margin model, which runs antithetical to how photographers want it. For so long as they don’t accept that, they will be at odds with any company that attempts it. At which point, the company has to choose which path to take: upset the pro photographer and succeed, or acquiesce and fail.

It is for this reason that I’ve predicted for several years that, barring any new disruptive innovation we haven’t seen yet, or a shift in photography-industry culture, the future of stock photography is likely to be inherited by much larger media companies that already deal with massive media distribution and licensing. They have no qualms about playing “Borg” and assimilating the photographer community into the flying cube, all the while chanting, “Resistance is futile.” Once such media behemoths realize there’s money to be made in photography, they will likely start acquiring agencies and photo-sharing sites, and building out the high-volume licensing model that is the only option left for stock anyway.

As for the controversy about the OWA, it’s just a theatrical venue for people to gain their individual advantage. Sure, there may be fine-tuning of language that industry leaders will take credit for to great fanfare, but that’s also part of the game. The Earth is not flat. But as long as there’s some benefit to people arguing about it, the controversy will continue.

Orphan Works Act: Courts and Law

In my prior post on the fallout of the Orphan Works Act, I looked at how history panned out for the Fair Use provisions of the Copyright Act as a barometer for forecasting the future of the OWA, were it to pass. I felt that this would calm the fears surrounding the bill, given that both Fair Use and OWA shared similar objections (and rationale) from artists. I concluded that, despite how the OWA may appear, it would pose no more of a threat than Fair Use has, which has already been established to be benign to artists.

However, feedback from some people suggests that I was speaking too abstractly. So, in this article, I want to speak more concretely and address head-on the most fundamental concerns people have about OWA:

1. that the bill is too vaguely worded to address the concerns germane to parties on both side of the law that it is intended to protect;
2. that it's too easy to establish a work as "orphaned";
3. that establishing a work as an orphan makes it an easily defensible candidate for infringing upon it;
4. that the infringer would be exempt from statutory damages, making them only liable for what the license fee would have been for the use; and
5. that the cost of pursuing infringers is prohibitive for artists, making it a virtual free ticket to infringe.

To properly address these concerns, I will walk through three basic legal principles and doctrines that will not only explain why the Orphan Works Act is fine as it is, but how it can be argued in court.

I begin by addressing the first concern, that of the "vagueness" of the OWA language, which brings us to the first legal principle:

"I know it When I See it"

Laws are written to serve two different interests at the same time: to protect some, while not taking away rights or protections from others. The Orphan Works Act cannot be worded more precisely than it is, or it risks becoming less effective. Why? Primarily, because when laws are written, there is a history behind it and cases that have come up that lead to why the law was crafted. Judges that decide cases read and learn what the intent is behind a given law, and then interpret the facts and circumstances of any given case that comes before them. As this happens, they get a gut feeling -- a "sense" -- for what's really going on behind the rhetoric of the plaintiffs. This was the inspiration for the phrase, "I know it when I see it," when Justice Potter Stewart, a 1964 supreme court justice, used it to express his feelings about the First Amendment. Despite how short and vague it is, cases can still be decided based on its spirit and intent. He wrote:

"I shall not attempt to define the kinds of material ... embraced within that shorthand description. But I know it when I see it..."

The people's interests are met when our courts have judges that rely on their sense of "right and wrong" when deciding cases, and therefore, we rely on judges to know when someone is trying to get away with something when they see it... "facts notwithstanding."

The Law of Unintended Consequences

The concerns of adding more specificity to the OWA is found in the "law of unintended consequences." By adding detailed language to include more parameters and restrictions, you may inadvertently end up introducing loopholes that work more against you than for you. This is so common that experienced lawmakers and lawyers alike have learned that, when drafting contracts or legislation, their best scenario is often found in the middle, where there's some ambiguity, not heavy-handedness on one side or the other. This is not just for legal advantage, but also political reality: ask too much, and the other side doesn't sign.

But, there is a legal strategy too: the more precise the language, in some cases, the easier it is for the other side to argue that their case lies outside of those specifics. Here, "the other side" may not be "the infringer," it could be you.

If you want the judge to consider whether your works were wrongly infringed, it'll be much easier to appeal to his senses about it, than to try to point to precise language that the other side could potentially wiggle out of with crafty arguments.

It's understandable that people may still feel uncomfortable about trusting judges to "know infringement when they see it." But, these are the same fears and hand-wringing that artists had about Fair Use when it was proposed. And yet, those fears never came to pass. Judges "knew Fair Use when they saw it," and history has proven it: there haven't been that many cases where infringers were able to get away with much. Similarly, judges know the intent of the OWA and will rule accordingly.

Of course, one doesn't rely on this principle alone -- the others play a major role in decisions -- but it's important to understand that judges do know it when they see it, as will you, which is often the compass by which you can navigate legal strategies by using the doctrines discussed next.

Examples

In this next section, I want to present some examples that I'll be using throughout the rest of this article.

1. A filmmaker made a documentary film on the construction of the Golden Gate Bridge, and he bought an old film reel from a flea market because it contained footage of the bridge being built. He performed a diligent search for the artist, but couldn't find him.
   
   
2. An airline used a photo of a year 2000 celebration in Times Square for the cover of an in-flight magazine. The photo was downloaded from someone's Flickr page (whose owner said he wasn't the photographer and doesn't remember where he got it). The airline performed a diligent search, but did not find the owner.
   
   
3. Someone found his parents wedding photos and wanted to make a new set of prints for their 50th wedding anniversary, and also publish them in a book that he dedicates to them. He has no idea who the photographer was, despite having done a diligent search.

One of these examples illustrates a case that is clearly outside the scope of the OWA's intentions. The other two are clearly within the intended use of the OWA. Can you tell which they are? Of course you can, and so can judges -- you know it when you see it. The question now is how to build a case.

"Unclean Hands" as a Judicial Factor

Before determining whether infringers are technically compliant with the letter the law, the first thing judges look for are signs of intent by the parties. Is someone acting in bad faith, or with "unclean hands?" (Read the Wikipedia entry here.) This is a basic legal doctrine that allows judges to rule against a plaintiff or defendant, even if they are fully compliant with the letter of the law. If the judge determines that they are acting unethically or in bad faith, he can rule against them. Using the airline's in-flight magazine as an example, the judge can clearly see that the intent of the magazine is not within the spirit of the law, and can rule against them, regardless of whether they've followed the eligibility requirements spelled out in the OWA.

Almost every fear that artists have had about the OWA can be alleviated by understanding the Unclean Hands doctrine. But, how do you establish that? Answer: incrementally. It begins during the discovery phase of a trial, where facts are gathered. Here, the judge is not just looking for whether an infringer did a "diligent search," and can produce documentation that shows he couldn't find the owner of a work. It starts with more basic questions: How did the defendant get the image in the first place? For what use? Why was the infringer searching for the work? What is it about the infringed work makes it so important that other similar photos weren't used instead? Was the defendant searching for (and using) many works besides this one? What's the ultimate objective of the larger project that the infringer was engaged in?

People have complained that the OWA is so vague because it says nothing about "who" the user is, or parameters for "how" the image can be used in order to be exempt from statutory damages. But with the Unclean Hands doctrine, none of this matters. Indeed, if those parameters were spelled out, it could actually compromise the effectiveness or persuasiveness of Unclean Hands. Having the OWA remain vague and unspoken on "who" or "how," the judge has more latitude to explore the defendant's intentions. And if he rules that the infringer was not acting in good faith, within the spirit of the OWA, irrespective of whether they acted within the letter of the law, the infringer can be liable for statutory damages.

The "Reasonable Inference" Rule

One of the other main concerns that artists have about the OWA is that there are billions of images on the internet, and the vast majority of them are not going to be in a searchable OWA database, let alone registered with the Copyright Office. Artists have asserted that an infringer could easily pick up one of these photos and genuinely attempt to find the owner, knowing full well that the likelihood of doing so is slim. The fear (and assertion) is that they have a free ticket to infringe.

Again, it isn't that simple. Judges and juries have latitude to determine factual issues and to draw "reasonable inferences" from circumstantial evidence. In the case, United States v. McCarrick, 294 F.3d 1286, 1293, 11th Cir. 2002, an inference is reasonable if it "flows from logical and probabilistic reasoning." This may not necessarily imply bad faith by the defense, but it certainly governs whether a judge would perceive an infringer from failing to properly derive a reasonable inference from these facts, thereby acting in a less "law-abiding manner" (which would then make him ineligible for protection by the OWA).

In other words, the question is not whether the work can be proven to be an orphan, but rather, whether there could be a reasonable inference that the photo was likely to be an orphan. Judges have full latitude in making this assessment, and ruling accordingly.

Using our example cases above, one could make a "reasonable inference" that the old film reel is a viable candidate as an orphan work, whereas the photo downloaded from the internet is otherwise: it's clearly current, hence the copyright has not expired and the owner is not likely to have abandoned it. The airline can produce all the "diligent search" records it wants, but when it comes to the spirit of the OWA, the judge can apply the "reasonable inference" rule: "there are other viable photos that are similar enough that are available for license from the known copyright holders; why did you choose this one?" The defense's answer must be one that does not draw attention to the obvious and reasonable inference that the reason that photo was chosen was because it was unlikely that the owner would be found.

Financial Risk

Finally, we get to the last of the most commonly cited criticisms of the OWA: that copyright holders hold a disproportionate financial burden, not just because it's costly to file claims, but because if the defense can show "diligent search", they would be exempt from statutory damages, even if they were to be found to infringe. This would make it financially difficult to recuperate those expenses by the photographer.

By now, you should already understand that the infringer bears considerably more risk than you may have originally thought, because of the three legal doctrines discussed so far: "I know it when I see it," "Unclean Hands", and the "Reasonable Inference" rule. Therefore, it is a misleading and erroneous assumption that artists bear undue burden. Infringers risk is far higher because most any "credible" use of OWA will be for cases like the documentary film, or the consumer printing old wedding photos. Most any other infringement where the defense claims OWA protection is more likely to lead judges to discern bad faith, and can therefore reinstate statutory damages.

How much at stake? Under copyright law, statutory damages range from $750 to $30,000, and the amount is at the discretion of the judge. In fact, if the judge considers an infringement to be "willful," which your lawyer can try to persuade the judge to do, if any of the above doctrines are satisfied, then he has the discretion to increase damages to $150,000. In any case, the infringer also has to pay the legal fees of the copyright holder.

How likely is this? Consider which is more likely: that the user will get away with infringement because he can show "diligent search" under questionable circumstances, facts, and conditions? Or that the copyright holder convinces a judge that the infringer knew what he was doing, and tried to intentionally hide behind the provisions of the OWA because it seemed easy to comply with the provisions. Regardless of which you think is more likely, the downside of the infringer being wrong will cause him to think twice, if not decide against attempting the infringement entirely.

Even really bad, evil-doing, photographer-killing, rights-grabbing baby-seal-bashing corporate weenies aren't that stupid. And if they are, sue 'em. The argument that photographers won't be able to afford to sue is nonsense. If someone's infringed on your work, and they're claiming OWA protection, you'll know what to do because "you'll know it when you see it." And a good lawyer will be able to easily make the case to the infringer as well by merely uttering the phrases, "Unclean Hands" and "Reasonable Inference." It won't even get to court; you'll end up with a tidy settlement that will make the effort financially risk-free.

Summary

The spirit and intent of the Orphan Works Act is to permit the use of photos by those who either have legitimate private uses, or can somehow be used for public good, or should be made available to the public for archival or research purposes, among many other benign reasons. Unfortunately, because the scope of such uses are so broad and difficult to define in legally binding language, the provisions of the eligibility clause are vague.

But this does not affect people's understanding of it. And courts know it, potential infringers know it, and now you know it.

My guess is that there would be so few attempts to infringe based on the Orphan Works Act, that conflicts will rarely arise. Concerns that infringers will feel "emboldened" by the OWA are unfounded. In fact, legal reality poses a great disincentive for anyone to attempt to use a work, orphaned or not, unless they can find the owner. And that fact alone removes a great deal of the arguments against the bill.

In fact, I would go further: not only will no one will perform more infringements because of OWA, but there could be potentially fewer overall infringements and an increase in licensing for no other reason that the OWA stipulates a searchable database, which users can use to find copyright holders for content they want to license legitimately. That database currently does not exist, and it won't unless OWA passes.

Orphan Works Fallout? History may lend a clue.

Wonder what the fallout will be if the Orphan Works Act passes? History may lend a clue.

Yes, the outrage (among photographers) continues to boil over the Orphan Works Act, the bill congress is considering, which limits the remedies in a civil action brought for infringement of copyright in an orphan work. I've written about it before, but the arguments still seems to be heated. In recent discussions I've had (and that I've read on other blogs and discussion forums), it's pretty clear that what people are worried about are that photographers' rights would be jeopardized, that rampant infringement would take place because it'd be too easy for infringers to establish a work as an "orphan," and that photographers would not be financially able to protect their copyrights.

While these are reasonable concerns, the question is whether they are justified. Is the language of the bill too broad? How can we test or measure what the real ramifications might be? I had an idea that would help people gain a more realistic perspective on this, and I tested it out on a few people who were vehemently against it. I began by tossing a few hypothetical situations their way. I asked, "How would you feel if..."

1. A publisher wants to reproduce your concert photos of a famous band for a book ... without asking you, paying you, or giving you attribution.
   
   
2. The makers of a movie biography of a famous fighter wants to use excerpts of your published footage ... without asking you, paying you, or giving you attribution.
   
   
3. A movie company wants to copy one of your ideas for a photo of a woman, and superimpose the head of an actor on top of it for use on a poster that promotes the movie ... without asking you, paying you, or giving you attribution.
   
   
4. A university wants to download photos on your website to use in an overhead presentation to be used in the classroom for a business course they offer every year ... without asking you, paying you, or giving you attribution.
   
   

Every person to whom I posed these scenarios reacted with outrage. Then I asked, "Do you think the Orphan Works Act would permit this?" Each said yes. Emphatically. In fact, one person said, "And it's because of ridiculous and outrageous scenarios like those that we must stop this bill immediately!"

Do you agree?

Here's what most people don't realize: All of these scenarios are already permitted by the Fair Use provision of the Copyright Act. In fact, not only are these cases permitted, but they've already happened. Moreover, each case (except for one) has been taken to court, and the court has ruled in favor of the user of the work, not the copyright holder.

Another surprise that may shock you: the works in question were not orphaned works; the copyright holders were known in advance, yet were still not contacted by the user. Here are the facts of each of the cases noted above:

1. Regarding the reproduction of concert photos in a book: In the case of Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006), the Second Circuit focused on the fact that the photos that were used had been reduced to thumbnail size and reproduced within the context of a timeline.
   
   
2. Regarding the makers of a movie biography: the movie was of Muhammad Ali, and the filmmakers used 41 seconds from a boxing match film. The court found that the portion of film that was taken was used for informational purposes. (Monster Communications, Inc. v. Turner Broadcasting Sys. Inc., 935 F. Supp. 490 (S.D. N.Y. 1996).)
   
   
3. In the case involving the movie poster, a movie company used a photo of a naked pregnant woman and superimposed the head of actor Leslie Nielsen. The photo was a parody using similar lighting and body positioning of a famous photograph taken by Annie Leibovitz of the actress Demi Moore for the cover of Vanity Fair magazine. The court ruled that the movie company's use was transformative because it imitated the photographer's style for comic effect or ridicule. (Leibovitz v. Paramount Pictures Corp., 137 F.3d 109 (2d Cir. N.Y. 1998).)
   
   
4. As for the university that wants to use a photo from your website in an overhead presentation, this kind of "face-to-face" electronic use of a photo in the classroom has been considered (de facto) Fair Use, and has never been challenged in court. (See here.)
   
   

So, what does this have to do with the Orphan Works Act? After all, if things are this bad with existing copyright law, the OWA will only make things worse, right? Well, that's where we need to gain some perspective, and draw upon history to help us forecast what may happen.

When the Copyright Act was under consideration, there was quite a bit of pushback from artists of all sorts, using arguments you hear today: that the Fair Use provisions are too broad, and that artists will lose the strength of their copyrights, and the ability to file claims would be prohibitive because the expense to do so would be too much of a financial burden for most artists. If works could be used for free, without attribution, or even permission, even though it may be clear who the copyright holder is, a court case is but an uphill, expensive battle. Moreover, the Fair Use provision could apply to anyone at all. The list of permitted uses was so broadly defined, that just about anyone would be able to do anything with a copyrighted work and call it "commentary," or "satire/parody," or "news reporting." Any of these are permitted under fair use, and it'd be an uphill battle to refute such claims..

Were those fears realized? Did that actually happen? The scenarios I described above would make it appear so. But, upon closer examination, history tells a very different story. The cases above are extremely rare exceptions, and were ruled under extremely narrow circumstances. Very similar cases come up far more often that not only don't get ruled as Fair Use, but continue to set new precedents all the time in favor of copyright holders, not users. Most infringers who use works and try to hide behind the Fair Use provisions fail in court and end up paying large sums of money to copyright holders, including their legal fees.

Why weren't the fears of the Fair Use Act realized? Simply put, judges know and understand the spirit of what the Fair Use provisions were intended to do: recognize that society can often benefit from the unauthorized use of copyrighted materials when the purpose of the use serves the ends of scholarship, education or an informed public.

Today, I have never read any credible criticism the the Fair Use provision of the Copyright Act, and in the 13 years that I've been a pro photographer, never have I heard anyone complain that their businesses are ruined by Fair Use, that they have lost any financial opportunity, that they have had a hard time enforcing their copyrights, or that there is a rampant misuse of images by those who hide behind Fair Use.

In fact, courts have been so "balanced" in their application of Fair Use provisions, that warnings to users about Fair Use are abundant. From Stanford University's section titled, "Disagreements Over Fair Use", there's this:

"... there is no predictable way to guarantee that your use will actually qualify as a fair use. You may believe that your use qualifies--but, if the copyright owner disagrees, you may have to resolve the dispute in a courtroom. Even if you ultimately persuade the court that your use was in fact a fair use, the expense and time involved in litigation may well outweigh any benefit of using the material in the first place."

Sound familiar? I'll come back to that in my next blog entry, to be announced soon.