Prepared Food Photos is coming to terms with the financial consequences of its relentless pursuit of massive damages for alleged infringement in its copyright in individual stock photographs.
Two years ago, it sent its standard demand letter to a Clyde’s Chicken King, a family-owned fast food joint in Port Barre and Opelousas Louisiana, objecting to the use of a photograph of a cardboard tray of fried chicken on the restaurant’s website, and threatening to sue for up to $150,000 in statutory damages unless the restaurant paid $30,000 within 21 days. The letter was full of lies and half-truths.
The letter claimed that Prepared Food Photos “is in the business of licensing high-end professional photographs for the food industry,” even though the truth is that PFP is in the business of pursuing copyright damages claims over photos previously licensed for as little as a dollar apiece. The letter claimed that, “to our knowledge [PFP] did not authorize you or your company to use” the photo, when the fact is that, during the period when PFP was using iStock to sell licenses to use its photos, it was never told who was getting the licenses – so the plain implication of the letter that it would know about any licensing was false. The letter threatened to seek an award of attorney fees and statutory damages up to $150,000, even though Chicken King’s use began before the date the copyright was registered, a fact that PFP should have known given that it regularly uses the Internet Archive to establish the date of first use for the purpose of seeking elevated damages amounts. The letter claimed that PFP licenses use of its photos for $999 per month, with a minimum subscription of a year, even though it has often allowed subscriptions at lower levels and many of the subscriptions are a sham, entered by the “subscriber” to avoid suits for past copyright infringement and by PFP to create a phony basis for seeking inflated copyright damages. The letter threatened to bring suit against Chicken King in federal court in Florida, even though PFP sues in Florida only when the defendant is located there. The letter pointed to huge court awards of damages in its previous cases, never mentioning that these awards are all default judgments.
In that way, the demand letter used deceptive tactics to ramp up the extortionate effect of a copyright enforcement campaign that I have criticized several times in the past. But the letter did contain one hard truth – “keep in mind that attorneys’ fees include those you will be forced to incur to mount a defense” – because the fact is that it can be very expensive to hire knowledgeable counsel to defend a copyright case, and Prepared Food Photos has been very careful only to file suit against alleged infringers who operate as corporations or LLC’s, and who thus cannot even defend pro se. When a defendant tries to appear pro se, PFP objects.
PFP’s business model is exceptionally lucrative. In the litigation in the Pool World case, we obtained in discovery a spreadsheet that showed that, in the year 2019 alone, the demand letters sent directly from PFP’s president Joel Albrizio to targets identified through reverse image searches produced well over $300,000, an amount far exceeding the income from subscription agreements. In another case, admissions from PFP during discovery included the concession that PFP’s main source of income is copyright enforcement, not copyright licensing, along with a characterization of the average settlement achieved by demand letters from PFP’s current counsel which, if true, would suggest that over a two-year period PFP’s take from the settlement may have exceeded ten million dollars (although presumably a contingent fee must have been paid out of that total). It will take discovery in an appropriate case to ascertain whether these eye-popping numbers are real.
The Demands to Chicken King, and the Resulting Litigation
In this case, the owners of Chicken King took the demand letter to be a scam, so they did not respond and also did not pay. Then earlier this year, PFP filed suit against Chicken King in federal court in Lafayette, Louisiana. Although Chicken King was unable to locate a local lawyer who was willing to defend it, it did find me, and I was ready to take the case pro bono — the only way a tiny company like this could afford to mount a copyright defense. Thanks to assistance from the Electronic Frontier Foundation, I was able to make contact with Heather Cross, a lawyer in Baton Rouge who was not in a position to take the case herself but was able to join as local counsel. I could not have done the case without her.
As I dug into the case, I learned that it was highly likely that, contrary to the allegations in the complaint, Chicken King did have a license for the use. But proving that fact has proved to be difficult. Chicken King hired ATT to create a website, and ATT contracted with another company to do the work. That company was willing to help, and it quickly searched its records to find a license. But unfortunately it did not have first-hand evidence of the license, only communications from a third company with which it had subcontracted to draft the site and secure appropriate imagery. That third company, VSplash, is based in India, and its contact was singularly unhelpful in nailing down, in the form of historical documents or an affidavit, the facts communicated to ATT’s contractor, that the fried chicken image was licensed from iStock Photos. It gave me increasingly snippy responses, first telling me that because it had no information for me. When pressed, it denied that it had ever had a relationship with ATT’s contractor. It remains unclear to me how easy or hard it would have been to compel disclosures from an Indian subcontractor to establish the existence of a license by admissible evidence. And a license is often treated as an affirmative defense, on which the accused infringer has the burden of proof. So this was not an argument on which we could get summary judgment without opening discovery in the case.
But the statute of limitations provided a means of getting the case dismissed quickly, without the need for discovery. In the Pool World case, we have been developing both the evidence and the legal arguments that would support the proposition that PFP’s copyright trolling based on repeated reverse image searching is so egregious that PFP should be denied the benefits of the discovery rule. And it seemed to me that this was an excellent case in which to present that argument, because in my experience, the problems we have had trying to nail down proof of Chicken King’s license is typical of the problems that troll targets have when infringement is alleged based on use of an image obtained many years before. Few business or small nonprofits design their own websites, and the volunteers or web design companies that do this work often come and go. Given that the discovery rule is an equitable exception to the statute of limitations (assuming that the discovery rule exception survives Supreme Court scrutiny), a trial court ought to consider whether the equities support allowing that exception in copyright troll cases
Our defense here was even stronger because discovery in the Pool World case provided us with access to the spreadsheet of reverse image searches showing us that on at least three occasions before 2022, the date when PFP’s complaint admits having located Chicken King’s use, PFP’s staff had located Chicken King’s uses, identifying the URL’s on the website where the image was located, The spreadsheet also showed that several demands had been sent to Chicken King. And also lucky, Chicken King was ALSO able to locate some of the demands that it had received. We attached this to a motion to dismiss or in the alternative for summary judgment. This past week, two days before plaintiff’s response to the motion to dismiss was due, it filed a stipulation dismissing the case with prejudice.
The Coming Issue of Attorney Fees
We have now sent PFP a request for its consent to an award of attorney fees. We will argue that the Kirtsaeng factors support an award of attorney fees both because the complaint contained multiple examples of unreasonable and even frivolous claims, and because considerations of compensation and deterrence cry out for an award of fees to discourage the sort of copyright trolling in which Prepared Food Photos has been engaged for the past seven years.
Albrizio wrote to me personally insisting that his company is unwilling to pay a dime in attorney fees; he says will throw himself on the mercy of the court to get justice. If the fees issue must be litigated, the judge will have to decide which side is the more deserving of mercy.
I get his anger about infringement about his stock photos. I even sympathize with his desire to enforce his copyrights (assuming their validity — some question about that has arisen in litigation in other cases). But Albrizio underestimates the anger and frustration of the small business people that get demand letters threatening to sue for $150,000 in damages unless they pay $30,000 right away. Many recipients relied on others to create their websites and have no recourse against those who mistakenly used copyrighted images in that regard. It is apparent that he is blind to the injustices being perpetrated in his name and that give his business a huge windfall.
Indeed, the evidence in the attorney fee proceeding will show that the great bulk of his income comes from copyright enforcement, not subscriptions, and that Albrizio knows that. This belies his plaintive self-presentation as an artist, and his claims to be most concerned to protect his subscribers against unfair competition. Many of his subscribers have agreed to pay subscriptions to avoid damages claims against themselves and their clients for past alleged infringement. I daresay that those “subscribers” would be glad to be rid of him.
Warning about Website Design Contractors
There is one additional lesson to be drawn from this litigation, for people getting a website constructed. As part of my investigation of this case, as noted above, one of the first things I needed to figure out was whether there was a proper license for the photo. Digital Space, the company currently maintaining the Chicken King website, which also handled that job as an ATT contractor back in 2015, was quick to take responsibility, and checking their records they were able to locate information showing that the design work, and acquisition of the images, had been subcontracted to an Indian company called VSplash. They were even able to supply the iStock catalogue numbers obtained from VSplash, and the names of their contacts at VSplash. But when I reached out to one of those VSplash contacts, he denied that his company ever had any relationship with the ATT contractor. Nonetheless, one of the contacts identified by Digital Space is shown by his LinkedIn profile to have been at VSplash at the time Chicken King’s website was being designed but to have left years ago. There is no reason why Digital Space would have this man’s name and email address unless they actually had a working relationship with his company. I pointed that out to the VSplash contact, but he continued to insist that VSplash did not work with the company.
But individuals and businesses in Chicken King’s position are at the mercy of their contractors when they later face claims for alleged wrongdoing in connection with their websites. They depend on the contractors taking responsibility for the work done on the website, including producing the licenses that they obtained for photographs used on their client’s sites.
