An Alabama lawyer recently sought my help responding to your February 9, 2024 demand letter to Foggy Bottom Farms, complaining about alleged infringement of Prepared Food Photos’ copyright in a photo of vegetable. Over the past several years, I have seen many demand letters from your client based on that photo (for example, your client’s demand to Brian Krueger). I suspect that it has been one your client’s most lucrative bases for making extortionate demands for payments of damages.
Has your client learned nothing from its litigation against Pool World? Or does it just hope to extract excessive settlements from a few more victims before the boom comes down in that case?
Because your demand letter makes no reference to statutory damages, and threatens to seek only taxable costs and not attorney fees, I must assume that you are aware that Foggy Bottom Farms began using the image as early as March, 2013, at a time when this image was available for licensing for as little as a dollar on iStock. Your claim is barred by the statute of limitations and if you were to sue Foggy Bottom Farms you would end up in the same mess as in the Pool World case.
Your client deliberately entered into an arrangement with iStock under which you were not told who was licensing which photos – but iStock will tell you, upon request, whether a given user was a licensee (as it did respond when your firm wrote to it before you sued Pool World). Did you ask this question of iStock before sending a demand letter representing to Foggy Bottom Farms that “to [y]our knowledge, [y]our client did not authorize” this use? If you don’t have that knowledge, it is only because your client deliberately blinded itself to the facts. Had you bothered to ask this question of iStock before sending the demand letter, you would have learned that the use was licensed.
Moreover, your letter falsely asserts that Prepared Food Photos “relies on a monthly subscription service.” So far as I have been able to determine, as recently explained here, that is true only to the extent that the monthly subscriptions are a charade, created to provide an evidentiary basis for demand letters seeking a settlement of $30,000 within 21 days.
Here is what the record shows: for many years, Joel Albrizio made an honest living as a minority owner of AdLife Marketing and Communications. After suing his business partners over the division of the profits, he became the sole owner of that company. He was in the business of creating advertising for grocery stores and other food vendors, as well as licensing stock photographs (through iStock and perhaps others) for use by those businesses as well as many others. We do not know how much he made from selling advertising services, but we do know, from your answers to interrogatories in the Pool World case, that for each of the years leading up to 2016, he made more than a hundred thousand dollars licensing access to stock photos through iStock.
Last fall, during the pendency of the Pool World litigation, a startling admission appeared in a blog post hosted by Albrizio’s other company, Bad Adz (you have not denied that Albrizio wrote this post). The post reveals AdLife’s having decided that making claims for copyright infringement might be even more lucrative than simply selling licenses. So, the post explained, AdLife pulled all its images off third-party licensing sites, registered its copyrights, and began searching for infringing uses over which it could make infringement claims. Careful readers will note that the link above is to an archived PDF of the blog post. That is because, although the article was posted at https://blog.bad-adz.com/blog/2023/11/21/prepared-food-photos-intellectual-property, after I asked you about that blog post, it was taken down.
Your client refused to answer in discovery just how lucrative its copyright infringement business has been. However, your initial disclosures in the Pool World case revealed that you client had secured default judgments of more than $400,580 in a sixteen-month period beginning March 2022. We now know that these default judgments were based on ex parte filings making representations about selling subscriptions. PACER shows that your client has filed 260 copyright infringement lawsuits, most of which were promptly settled; we assume that these settlements also produced large payouts. And you admitted last fall that your firm had sent 1800 demand letters in the past couple of years. Assuming even moderate success at copyright bullying, my back-of-the envelope calculations last year suggested that your client’s revenues from infringement claims are well into the millions, maybe the tens of millions. So the decision to stop selling licenses through stock sites and become a copyright troll appears to have been a sound business move.
Moreover, unlike the business of claiming infringement, the business of selling monthly subscriptions to its entire database of photos has apparently not been successful. In fact, as discussed last week, it appears that some if not all of the subscription agreements were really just ways for the targets of claims of infringement to pay damages for the alleged infringements – that is, it appears to me that your client used claims of infringement to create an illusionary evidentiary basis for claiming exceptionally large amounts of statutory damages.
What’s more, the documents disclosed in the Pool World litigation suggest that in first three years of registration – 2016, 2017, and 2018 – your client’s income from selling licenses dropped precipitously it did not even come close to the annual licensing income obtained from iStock licensing. You produced the subscription agreements in discovery. None of them were entered in 2016. Four one-year subscription agreements were entered in 2017: one on January 5, 2017 for $499 per month; one on April 6, 2017 for $999 per month; one document was signed by your client on February 24, 2017 but not by the subscriber, for $999 per month; and one agreement was signed on February 27, 2019 for $999 per month. The monthly payments for those contracts would have totaled $3,496; even assuming full monthly payments for the months in which the contracts were signed, that would produce an annual payout of $36,967. You produced only two contracts signed in 2018, for $500 per month signed September 13, 2018 and for $999 per month signed on November 27, 2018. Those alone would have produced about $3000 for the entire year;combined with the income from the months of 2018 when the 2017 agreements were running out, that would produce a licensing income of roughly $11,000. When I asked you to explain the apparent discrepancy between Rebecca Jones’ sworn interrogatory answer about subscription revenue (which placed the subscription income in 2017 and 2018 at higher levels, although still well under $100,000) and the produced documents, you told me that you were too busy to respond. But I now must infer that one of the reasons you sought a stay of the Pool World litigation was that our threatened motion to compel discovery would have risked showing the interrogatory answer to be false.
It does appear that the level of income from subscription agreements went up in 2019 and thereafter, but again the produced documents do not support the amount of subscription income claimed, and in any event we now know, both from the face of the agreements as well as what learned from talking to the subscribers, that most if not all of these agreement were entered only as a substitute for paying damages for claims of copyright infringement, based on settlement demands representing that the damages claims were supported by the phony subscription agreement system.
There is, I might add, a false statement in the (removed) Bad Adz blog post about Prepared Food Photos’ change of business model. It states that AdLife’s third party vendors were unwilling to help AdLife pursue unlicensed uses. But we know that Getty had an active approach to sending demand letters and filing suit over unlicensed uses. Getty Images said in response to a subpoena that AdLife did not participate in that program. But it could have. So there is no reason why AdLife could not have continued to sell licenses on a one-by-one basis, while having Getty enforce its copyrights. Rather, AdLife apparently decided that it had a better way of profiteering on inflated infringement claims. Again, when I asked you to explain the apparent discrepancy between the Bad-Adz blog post and the historical record, you told me that you were too busy to respond.
On this analysis, it appears to me that the only sound reason for your client’s move away from licensing via iStock was to enable claims for infringement based on a fraudulent damages theory.
Your client’s reign of terror has been very successful, but it is time for that reign of terror to end. I do not currently represent Foggy Bottom Farms – they have a very good lawyer in Alabama. I trust you will not force him to enter an appearance in any litigation.
